RESTRICTED  
  
WT/TPR/S/390  
11 June 2019  
(19-3978) Page: 1/127 
Trade Policy Review Body   
 
TRADE POLICY REVIEW  
REPORT BY THE SECRET ARIAT  
THE REPUBLIC OF NORTH MACEDONIA  
This report, prepared for the second Trade Policy Review of the Republic of North Macedonia, has 
been drawn up by the WTO Secretariat on its own responsibility. The Secretariat has, as required by 
the Agreement establishing the Trade Policy Review Mechanism (Annex 3 of the Marrakesh 
Agreement Establishing the World Trade Organizat ion), sought clarification from the Republic of 
North Macedonia on its trade policies and practices.  
 
Any technical questions arising from this report may be addressed to Mr. Mark Koulen (tel: 022 739 
5224); Ms. Martha Lara Fernandez (tel: 022 739 6033);  and Mr. Pierre Latrille (tel: 022 739 5266) . 
 
Document WT/TPR/G/390 contains the policy statement submitted by the Republic of North 
Macedonia.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note: This report is subject to restricted circulation and press embargo until the end of the first 
session of the meeting of the Trade Policy Review Body on the Republic of North Macedonia. This 
report was drafted in English.  
  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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CONTENTS  
SUMMARY  ................................ ................................ ................................ ........................  7 
1   ECONOMIC ENVIRON MENT  ................................ ................................ ........................  13 
1.1   Main Features of the Economy  ................................ ................................ ..................... 13 
1.2   Recent Economic Developments  ................................ ................................ ................... 13 
1.2.1    Monetary and exchange rate policy  ................................ ................................ ............ 16 
1.2.2    Fiscal policy  ................................ ................................ ................................ ............ 16 
1.2.3    Structural issues  ................................ ................................ ................................ ......16 
1.2.3.1    Tax and public financial management reform  ................................ ............................ 17 
1.2.3.2    Labour market  ................................ ................................ ................................ ......17 
1.2.3.3    Business environment  ................................ ................................ ........................... 17 
1.2.4    Balance of payments  ................................ ................................ ................................ 18 
1.3   Developments in Trade and Investment  ................................ ................................ ........ 20 
1.3.1    Trends and patterns in merchandise trade  ................................ ................................ ..20 
1.3.2    Trends and patterns in FDI  ................................ ................................ ....................... 23 
2   TRADE AND INVEST MENT REGIMES ................................ ................................ ...........  24 
2.1   General Framework  ................................ ................................ ................................ ....24 
2.2   Trade Policy Formulation and Objectives  ................................ ................................ ........ 24 
2.3   Trade Agreements and Arrangements  ................................ ................................ ........... 25 
2.3.1    WTO ................................ ................................ ................................ ...................... 25 
2.3.2    Regional and preferential agreements  ................................ ................................ ........ 26 
 Stabilization and Association Agreement (SAA) with the European Union  ..................... 27 
2.3.2.2    Free Trade Agreement with the European Free Trad e Association (EFTA)  ..................... 28 
2.3.2.3    The Central European Free Trade Agreement (CEFTA)  ................................ ............... 28 
2.3.2.4    Free Trade Agreement with Turkey  ................................ ................................ ......... 29 
2.3.2.5    Free Trade Agreement with Ukraine  ................................ ................................ ........ 29 
2.3.3    Other agreements and arrangements  ................................ ................................ ......... 29 
2.4   Investment Regime  ................................ ................................ ................................ ....30 
3   TRADE POLICIES A ND P RACTICES BY MEASURE  ................................ ........................  33 
3.1   Measures Directly Affecting Imports  ................................ ................................ .............. 33 
3.1.1    Customs procedures, valuation, and requirements  ................................ ....................... 33 
3.1.1.1    Customs procedures and requirements  ................................ ................................ ....33 
3.1.1.2    Customs valuation  ................................ ................................ ................................ 35 
3.1.1.3    Pre-shipment inspection  ................................ ................................ ........................ 36 
3.1.1.4    Special customs regimes  ................................ ................................ ........................ 36 
3.1.2    Rules of origin  ................................ ................................ ................................ ......... 37 
3.1.3    Tariffs  ................................ ................................ ................................ .................... 38 
3.1.3.1    Tariff rate quotas  ................................ ................................ ................................ ..41 
3.1.3.2    WTO bindings  ................................ ................................ ................................ .......42 
3.1.3.3    Preferential tariffs  ................................ ................................ ................................ .43 WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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3.1.4   Other charges affecting imports  ................................ ................................ ................. 44 
3.1.5    Import prohibitions, restrictions, and licensing  ................................ ............................ 44 
3.1.6    Anti-dumping, countervailing, and safeguard measures  ................................ ................ 45 
3.2   Measures Directly Affecting Exports  ................................ ................................ .............. 46 
3.2.1    Customs procedures and requirements  ................................ ................................ .......46 
3.2.2    Taxes, charges, and levies  ................................ ................................ ........................ 46 
3.2.3    Export prohibitions, restrictions, and licensing  ................................ ............................. 46 
3.2.4    Export support and promotion  ................................ ................................ ................... 46 
3.2.5    Export finance, insurance, and guarantees  ................................ ................................ ..48 
3.3   Measures Affecting Production and Trade  ................................ ................................ .......49 
3.3.1    Taxation  ................................ ................................ ................................ ................. 49 
3.3.2    Incentives  ................................ ................................ ................................ ............... 50 
3.3.3    Standards and other technical requirements  ................................ ............................... 53 
3.3.4    Sanitary and phytosanitary measures  ................................ ................................ ......... 55 
3.3.4.1    Sanitary regulations  ................................ ................................ .............................. 57 
3.3.4.2    Veterinary regulations  ................................ ................................ ........................... 57 
3.3.4.3    Phytosanitary regulations  ................................ ................................ ....................... 58 
3.3.5    Competition policy, state aid and price controls  ................................ ........................... 60 
3.3.5.1    Competition policy  ................................ ................................ ................................ 60 
3.3.5.2   State aid  ................................ ................................ ................................ .............. 62 
3.3.5.3    Price controls ................................ ................................ ................................ ........ 63 
3.3.6    State trading, state -owned enterprises, and privatization  ................................ ............. 63 
3.3.7    Government procurement  ................................ ................................ ......................... 64 
3.3.8    Intellectual property rights  ................................ ................................ ........................ 70 
4   TRADE POLICIES B Y SECTOR  ................................ ................................ .....................  75 
4.1   Agriculture, Forestry, and Fisheries  ................................ ................................ ............... 75 
4.1.1    Features and market development  ................................ ................................ ............. 75 
4.1.2    Policy objectives and administration  ................................ ................................ ........... 79 
4.1.3    Policy instruments  ................................ ................................ ................................ ...81 
4.1.3.1    Border measures  ................................ ................................ ................................ ..81 
4.1.3.1.1    Measures affecting imports  ................................ ................................ .................. 81 
4.1.3.1.2    Measures affecting exports  ................................ ................................ .................. 81 
4.1.3.2    Internal measures  ................................ ................................ ................................ .82 
4.1.3.2.1    Support measures  ................................ ................................ .............................. 82 
4.1.3.2.2    Price controls and market price support systems  ................................ .................... 86 
4.1.3.2.3    Other measures  ................................ ................................ ................................ .86 
4.1.3.3    Levels of support  ................................ ................................ ................................ ..86 
4.2   Mining and Energy  ................................ ................................ ................................ ......87 
4.2.1    Mining  ................................ ................................ ................................ .................... 87 
4.2.2    Energy  ................................ ................................ ................................ ................... 89 WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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4.2.2.1    Overall energy strategy, including environmental aspects  ................................ .......... 89 
4.2.2.2    Coal ................................ ................................ ................................ .................... 92 
4.2.2.3    Oil ................................ ................................ ................................ ....................... 92 
4.2.2.4    Gas ................................ ................................ ................................ ..................... 93 
4.2.2.5    Electricity  ................................ ................................ ................................ ............. 94 
4.3   Manufa cturing  ................................ ................................ ................................ ............ 96 
4.4   Services  ................................ ................................ ................................ .................... 99 
4.4.1    Telecommunications services  ................................ ................................ .................... 99 
4.4.2    Financial services  ................................ ................................ ................................ ... 102 
4.4.2.1    Overview  ................................ ................................ ................................ ...........  102 
4.4.2.2    Banking se rvices  ................................ ................................ ................................ . 102 
4.4.2.3    Insurance services  ................................ ................................ ..............................  105 
4.4.2.4    Stock exchange and securities  ................................ ................................ ..............  107 
4.4.2.5    Pension funds  ................................ ................................ ................................ ..... 108 
4.4.3    Transport services  ................................ ................................ ................................ . 110 
4.4.3.1    Transport infrastructure challenges and policy  ................................ ........................  110 
4.4.3.2    Road transport services  ................................ ................................ .......................  111 
4.4.3.3    Rail transport services  ................................ ................................ .........................  114 
4.4.3.4    Air transport services  ................................ ................................ ..........................  115 
4.4.4    Tourism services  ................................ ................................ ................................ .... 117 
5   APPENDIX TABLES  ................................ ................................ ................................ .. 120  
 
CHARTS  
 
Chart 1.1 Product composition of merchandise trade by HS section, 2012 and 2018  ................... 21 
Chart 1.2 Direction of merchandise trade, 2012 and 2018  ................................ ....................... 22 
Chart 3.1 Tax revenue distribution (and percentage of total tax revenues), 2018  ....................... 38 
Chart 3.2 Structure of MFN tariff rates, 2013 and 2019  ................................ ........................... 39 
Chart 3.3 Breakdown of applied MFN and preferential tariffs  ................................ .................... 43 
Chart 4.1 Agricultural trade by main partners, 2010 and 2018  ................................ ................. 79 
Chart 4.2 Total Primary Energy Supply (TPES) by energy source  ................................ .............. 89 
Chart 4.3 Electricity generation by fu el ................................ ................................ ................. 94 
Chart 4.4 Electricity generation from renewables, by source  ................................ .................... 95 
Chart 4.5 Total final consumption of energy, by type of consumer  ................................ ............ 95 
 
TABLES  
 
Table 1.1 Selected macroeconomic indicators, 2012 -18 ................................ ........................  14 
Table 1.2 Balance of payments, 2012 -18 ................................ ................................ ............  18 
Table 1.3 Trade in services by sector, 2012, 2014, and 2016 -18 ................................ ............  19 
Table 1.4 FDI inward stock, 2012 -17 ................................ ................................ ..................  23 WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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Table 3.1 Special customs regimes  ................................ ................................ .....................  36 
Table 3.2 Structure of MFN tariffs, 2019  ................................ ................................ .............  39 
Table 3.3 Applied MFN tariff summary, 2019  ................................ ................................ ....... 40 
Table 3.4 Products subject to tariff rate quotas  pursuant to the FTAs in 2017  ..........................  42 
Table 3.5 Tariff lines where applied MFN rates may exceed bound rates, 2019  .........................  42 
Table 3.6 Tariffs under preferential agreements, 2019  ................................ ..........................  44 
Table 3.7 Active TIDZs  ................................ ................................ ................................ ..... 47 
Table 3.8 Amount of exports insured, and premiums percei ved by the export credit system,  
2012-18 ................................ ................................ ................................ .........................  48 
Table 3.9 Taxation, as at 1 January 2019  ................................ ................................ ............  50 
Table 3.10 Fund for Innovation and Technology Development: annual budget, 2014 -19 ...........  52 
Table 3.11 Summary: support measures under the Programme for Competitiveness,  
Innovation and Entrepreneurship, 2019  ................................ ................................ ..............  52 
Table 3.12 Legal acts adopted on the basis of the Law on Plant Health  ................................ ... 59 
Table 3.13 Decisions by the Commission for the Protection of Competition, 2013 -18 ................  62 
Table 3.14 State -Owned Enterprises, 2019 ................................ ................................ ..........  64 
Table 3.15 Minimum thresholds for application of the new Public Procurement Law  ..................  66 
Table 3.16 Thresholds for the publication of contract notices in the Official Journal of the 
European Union  ................................ ................................ ................................ ...............  67 
Table 3.17 Number and value of public contracts awarded by type of procurement  
procedure, 2013 -2017 ................................ ................................ ................................ ...... 68 
Table 3.18 Value of public contracts awarded to foreign economic operators, 2013 -2017 ..........  69 
Table 3.19 Appeals lodged before the State Appeals Commission, 2013 -2017 .........................  70 
Table 3.20 Selected WIPO and IP -related treaties in force in North Macedonia, 2019  ................  71 
Table 3.21 Trademark statistics, 2013 -2018 ................................ ................................ ........  72 
Table 3.22 Patent statistics, 2013 -2018 ................................ ................................ ..............  73 
Table 4.1 Gross value added (GVA) and employment in the agriculture, forestry, hunting  
and fishery sector, 2010 -18 ................................ ................................ ..............................  75 
Table 4.2 Crops: area, production and yield, 2010 -17................................ ...........................  75 
Table 4.3 Livestock: herd size, 2010 -17 ................................ ................................ ..............  76 
Table 4.4 Value of production, 2012 -16 ................................ ................................ ..............  76 
Table 4.5 Trade in agricultural products, 2010 -18 ................................ ................................  77 
Table 4.6 Agricultural exports by products (HS code), 2010, 2012, 2014, and 2016 -18 ............  77 
Table 4.7 Agricultural imports  by product (HS code), 2010, 2012, 2014, and 2016 -18 ..............  78 
Table 4.8 Tariff -rate quotas and fill rates, 2013 -17................................ ...............................  81 
Table 4.9 Budget outlays and effective disbursements for yearly programmes of support  
(2010 -17) ................................ ................................ ................................ .......................  82 
Table 4.10 Direct payment schemes and input subsidies, 2010 -17 ................................ .........  83 
Table 4.11 Budgetary support to agriculture according to the OECD/PSE classification,  
2010-15 ................................ ................................ ................................ .........................  87 
Table 4.12 Production of metallic minerals, 2010 -17 ................................ ............................  88 
Table 4.13 Gross production of renewable energy, 2012 -16 ................................ ..................  91 WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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Table 4.14 Share of electricity from renewable sources in total electricity production and  
in gross national electricity consumption, 2012 -16 ................................ ...............................  91 
Table 4.15 Coal trade balance, 2012 -16 ................................ ................................ ..............  92 
Table 4.16 Oil and oil products trade balance, 2012 -16 ................................ .........................  92 
Table 4.17 Gas trade balance, 2012 -16 ................................ ................................ ..............  93 
Table 4.18 Trade balance for electricity and heating, 2012 -16 ................................ ...............  94 
Table 4.19 Manufacturing sector, 2012 -17 ................................ ................................ ..........  96 
Table 4.20 Strategic objective s and operationalizing measures of the Industrial Strategy  ..........  98 
Table 4.21 Telecommunication prices, 2017  ................................ ................................ ...... 100 
Table 4.22 Main transport infrastructure projects' budgets and sources of financing  ...............  110 
Table 4.23 Road freight and passenger traffic, 2013 -17 ................................ ......................  112 
Table 4.24 Trucks (over 3.5 t) and coach fleets, 2017  ................................ ........................  112 
Table 4.25 Road transport quotas/permits negotiated by North Macedonia  ............................  113 
Table 4.26 Passenger and cargo traffic on the rail network, 2013 -18 ................................ .... 114 
Table 4.27 Cargo and passenger traffic, 2013 -18 ................................ ...............................  116 
Table 4.28 Air transport agreements  ................................ ................................ ................  117 
Table 4.29 Tourism sector: evolution of the main economic indicators, 2013 -18 ....................  117 
Table 4.30 Tourist arrival, by type of accommodation facility, 2011 -15 ................................ . 118 
Table 4.31 Number of hotel nights, 2013 -17 ................................ ................................ ..... 118 
 
BOXES  
 
Box 3.1 Main changes introduced by the new Law on Public Procurement ................................  65 
Box 4.1 Main economic indicators in the telecom sector  ................................ ........................  99 
Box 4.2 Financial services: statistical overview, 2013 and 2017  ................................ ...........  102 
Box 4.3 Statistical overview of the banking sector, 2013 and 2017 -18 ................................ .. 102 
Box 4.4 Statistical overview of the insurance sector, 2013 and 2017  ................................ .... 105 
Box 4.5 Statistical overview of the stock exchange and securities sector, 2013 and 2017  ........  107 
Box 4.6 Statistical overview of the pension sector, 2013 and 2017  ................................ ....... 109 
Box 4.7 ECMT multilateral quotas for North Macedonia, 2019  ................................ ..............  114 
 
APPENDIX TABLES  
 
Table A1. 1 Merchandise imports by HS sections and major HS chapters, 2012 -18 .................  120 
Table A1. 2 Merchandise exports by HS sections and major HS chapters, 2012 -18 .................  121 
Table A1. 3 Merchandise imports by origin, 2012 -18 ................................ ..........................  122 
Table A1. 4 Merchandise exports by destination, 2012 -18 ................................ ...................  123 
 
Table A2. 1 Selected notifications under WTO Agreements, 31 March 2019  ...........................  124 
 
Table A3. 1 Incentives under the 2018 Law on Financial Support of Investments  ...................  126 WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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SUMMARY  
1. As a small, landlocked, middle -income country of 2 million people with a GDP of around 
EUR 11 billion, the Republic of North Macedonia (hereafter: North Macedonia) is dependent on 
trade, with exports and imports in goods and services representing around 133% of GDP in 
2018.  
2. The services sector is the largest contributor to GDP (64% of GDP in 2018), followed by 
manufacturing (15%), agriculture, forestry and fishing (8.4% ) and construction (7%). GDP 
growth averaged 2.2% on an annual basis from 2012 to 2018, and is expected to remain at this 
level in the medium term. Between 2012 and 2018, GDP per capita rose by more than 40%, and 
unemployment declined from 31.0% to 20.7%. The period also witnessed a substantial reduction 
in poverty.  
3. The current account deficit narrowed from EUR 240 million (3.2% of GDP) in 2012 to EUR 31.9 
million (0.3% of GDP) in 2018. This is due to a reduction of the trade balance deficit, and to an 
increase in the surplus of the services balance.  
4. Imports and exports of goods grew constantly during the review period, but the growth rate of 
exports was more sustained. The share in GDP of merchandise exports increased from 30.4% in 
2012 to 45.5% in 2018, while that of merchandise imports rose from 56. 9% to 61.6%. The 
share of manufacturing in total merchandise exports increased from 71.8% in 2012 to 82.3% in 
2017. The composition of exports of manufactures also changed significantly, as illustrated by 
the increase in the relative shares of machinery an d transport equipment, and chemicals. The 
surplus of the services balance grew during the review period, as the increase in the value of 
exports of services exceeded that of imports of services. The growth of services exports is mainly 
due to construction,  computer services, and professional services.  
5. In 2018, the European Union's share in North Macedonia's exports of goods was 82.0% and its 
share in North Macedonia's imports of goods was 62.4%.   
6. FDI net inflows rose from approximately EUR 131.0 million in  2012 (1.5% of GDP) to 
EUR 621.9  million in 2018 (5.8% of GDP). The European Union accounted for 76.7% of the FDI 
inward stock in 2017. Nearly half of the FDI inward stock (45.2% in 2017) is in the services 
sector. The share of the manufacturing sector in the FDI inward stock reached 36.8% in 2018, 
which reflects a substantial increase in the share of vehicles and other transport equipment.  
7. Following a period of significant increases in public debt, a process of gradual fiscal consolidation 
was initiated in  2018, through reforms of taxation, pensions and social assistance benefits, and 
the improvement of the management of public finances. The monetary policy stance has been 
mainly accommodative.  
8. The pursuit of EU integration has been one of the main driving forces for the legal, institutional 
and economic reforms undertaken so far by North Macedonia. For more than a decade, the 
authorities have engaged in the process of aligning national legislation with EU law ( acquis 
communautaire ). The return of stability after the political crisis of 2015 -17 enabled North 
Macedonia to address certain challenges that had formed an obstacle to the country's European 
and international integration. In June 2018, the European Union agreed to respond positively to 
the recent pro gress made by North Macedonia, particularly on the implementation of institutional 
reforms and the resolution of the name issue with Greece, and set out the path towards opening 
accession negotiations in June 2019.  
9. Recent reforms of business regulations re sulted in a significant improvement in certain aspects 
of the climate for doing business, both for domestic and foreign investors. At the same time, 
structural economic and social challenges remain, including with respect to labour market 
weaknesses, the l arge size of the informal sector (estimated at 34% of GDP in 2014 and 18% 
of employment in 2018), and the quality of public institutions. Increasing productivity is a key 
condition to improving the country's economic performance. The continued effective 
implementation of institutional reforms would boost confidence in North Macedonia's economy.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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10. North Macedonia became a Member of the WTO in 2003, and its trade policies were reviewed 
once, in 2013. It has regularly notified the WTO of the trade measures it ad opted since the 
previous Review. Some notifications are still pending, including those on domestic support for 
agricultural products. North Macedonia has not been involved in any proceedings under the WTO 
dispute settlement mechanism.  
11. North Macedonia parti cipates in five free trade agreements (FTAs), which, together, accounted 
for 95% of its exports and 78% of its imports in 2018. In terms of trade coverage, the two most 
important agreements are the 2004 Stabilization and Association Agreement (SAA) with th e 
European Union, and the Central European Free Trade Agreement (CEFTA). The SAA provides 
for the harmonization of North Macedonia's legal and regulatory framework with EU law, to 
prepare for accession negotiations. Pursuant to the SAA, two -way trade has b een completely 
liberalized. Trade with parties to the CEFTA constitutes 11.1% of North Macedonia's exports and 
8.9% of its imports. The parties to the CEFTA achieved full liberalization of trade in industrial 
and agricultural products in 2015. North Macedo nia did not conclude any new FTAs since the 
previous Review.  
12. North Macedonia also took measures aimed at increasing its attractiveness to foreign investors, 
such as targeted investment promotion strategies, and financial and other types of incentives, 
including in the context of the Technological Industrial Developm ent Zones. The investment 
regime is generally open to FDI, with only a few legal restrictions, in domestic and international 
air transport and gambling, and foreign ownership of non -agricultural land. North Macedonia is 
cooperating with five other Western Balkan economies to harmonize national investment policies 
and align them with EU standards and international best practices.  
13. North Macedonia continued to update and modernize its customs legislation, particularly with a 
view to achieving convergence with  EU customs rules and improving the efficiency of the 
collection of import duties and other taxes.  An important aspect of the alignment of North 
Macedonia's customs administration with the EU acquis  is the development of a new Customs 
Declarations and Exci se Documents Processing System (CDEPS), which will replace the current 
ASYCUDA computerized declaration system and is expected to become fully operational in June 
2019. Recent studies suggest that the efficiency of North Macedonia's customs procedures has 
improved.  
14. North Macedonia has implemented 99.2% of its commitments under the Trade Facilitation 
Agreement, which it accepted in October 2015, and will have implemented another 0.8% by 
December 2019 without capacity -building support. It became a party to t he Convention on a 
Common Transit Procedure and the Convention on the Simplification of the Formalities in Trade 
in Goods between EU Member States and EFTA countries in July 2015, and a party to the CEFTA 
Additional Protocol 5 on Trade Facilitation in Janu ary 2018.  
15. While there were no fundamental changes to North Macedonia's legislation on customs valuation 
during the review period, new provisions on transfer pricing entered into force in January 2019. 
North Macedonia has no laws or regulations relating to pre-shipment inspection, and does not 
use pre -shipment inspection services.  
16. North Macedonia grants at least MFN tariff treatment to imports from all WTO Members and non -
WTO Members. The simple average of the 2019 applied MFN tariff is estimated at 8.5%, w hich 
remains almost identical to that of 2013. The coefficient of variation of 1.3 indicates high 
dispersion, with rates ranging from zero to 75.0%. The average applied tariff on agricultural 
products is 17.6%, while that on non-agricultural products is 5. 8%. The applied MFN tariff 
structure shows tariff escalation in certain categories of products. North Macedonia has bound 
100% of its tariff lines at rates ranging from zero to 75%. As in the case of applied tariffs, 
ad valorem  rates apply to most bound ta riff lines, except for certain agricultural products with 
compound and mixed bound tariffs. The simple average bound rate on agricultural products is 
18.2%, while that on non -agricultural products is 6.3%.  
17. The importation of certain goods (e.g. certain an imals and birds, plants, fertilizers, narcotics, 
arms, and ozone -depleting substances) is prohibited for reasons related mainly to the protection 
of national security, public morals, the environment, health, endangered species, and national 
treasures of ar tistic, historical or archaeological value. For similar reasons, certain categories of WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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products are subject to import licensing. The product coverage of this import licensing regime 
has not changed in recent years.  
18. The legal framework governing the applic ation of trade contingency measures did not change 
during the review period, and North Macedonia did not impose any anti -dumping, countervailing 
duty or safeguard measures,  or initiate  any anti -dumping, countervailing duty or safeguard 
investigations.  
19. North Macedonia does not apply export duties. The export of certain products is prohibited or 
subject to licensing for reasons of protection of human, animal or plant life or health, protection 
of public morals, and protection of the environment.  The list of p roducts subject to export 
prohibition or export licensing did not change since the previous Review. In March 2018, North 
Macedonia amended its export control law, by adopting a new list of dual -use goods and 
technologies that transposes Annex 1 of the rele vant EU regulation.  
20. With the aim of attracting investment and accelerating business development, North Macedonia 
maintains a competitive taxation system, with some of the lowest rates worldwide. Companies 
are subject to a corporate income tax on realized profits, at a rate of 10%. VAT is charged at a 
standard rate of 18% on the supply and import of goods and services. A lower rate of 5% applies 
to supplies of certain basic goods and services. Until recently, personal income tax was set at a 
flat rate of 10 %. As of 1 January 2019, the portion of income that exceeds MKD 90,000 per 
month is taxed at a rate of 18%, and income up to MKD 90,000 continues to be taxed at a rate 
of 10%. Income from capital, property, industrial property rights, insurance, capital ga ins, 
games of chance and other income is taxed at 15% (raised from 10%).  
21. The Government offers numerous support measures to enterprises as part of its overall economic 
strategy to promote industrial development, competitiveness, and the creation of new an d 
better -paid jobs. A key objective of many of these measures is to encourage investment, 
particularly in manufacturing, and to promote linkages between foreign investors and domestic 
firms to increase the country's integration in global value chains. The Economic Growth Plan, 
published in February 2018, which is closely related to the new Industrial Strategy, seeks to 
stimulate growth in the industrial sector, focusing on manufacturing. It envisages three types of 
financial support (pillars), the first two  of which are implemented through the Law on Financial 
Support of Investments, promulgated in May 2018. The first pillar involves several general 
measures to support investment, one of which relates to the purchase of products from domestic 
suppliers, whil e the second pillar involves measures for improving competitiveness and 
internationalization. The third provides for measures to foster the development of micro, small 
and medium -sized enterprises.   
22. North Macedonia's industrial policy instruments were furt her developed and funded in the past 
few years. The challenges currently facing the authorities are to ensure the effective 
implementation of these instruments, to adequately monitor their results, to strengthen 
coordination among the different government agencies involved in their implementation, and to 
avoid overlapping of measures and institutional responsibilities.  
23. North Macedonia continued the process of harmonizing its technical regulations and standards 
with relevant EU  rules, with a view to preparin g for accession to the European Union. Thus, the 
Standardization Institute of the Republic of North Macedonia adopted 28,898 standards, most 
of which are European standards. The authorities aim to achieve full harmonization with the EU 
acquis  in product sa fety during the period 2019 -21, particularly through the transposition of EU 
New Approach Directives. Since the last Review, North Macedonia submitted one notification to 
the WTO Committee on Technical Barriers to Trade.   
24. Similarly, most changes made to t he regulatory and institutional framework for the application 
of sanitary and phytosanitary measures since the previous Review were aimed at harmonization 
with international norms, especially EU rules. The Government is focusing on streamlining 
practices a nd implementing various measures related to the EU acquis regarding field inspection 
services, official controls, food and feed safety, animal disease control, plant health and  plant 
protection products, control of veterinary medicinal products, and enhanc ement of border post 
import controls.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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25. The Law on the Protection of Competition (LPC) regulates anti -competitive behaviour and 
concentrations. It prohibits agreements, decisions and concerted practices between 
undertakings, which have as their object or eff ect the distortion of competition, and provides an 
illustrative list of these agreements, which are to be considered null and void.  The LPC also 
specifies the situations in which the abuse of dominant position in the relevant market, or a 
substantial part thereof, is prohibited, and provides for the ex ante  control of mergers. During 
the review period, the Commission for the Protection of Competition maintained a significant 
level of activity.  
26. Price controls apply in the form of regulated and approved price s (not direct controls) on a few 
products and services, which are characterized by monopolistic supply conditions. Prices in the 
energy sector (oil derivatives and electricity for universal/last resort suppliers) and prices of 
telecommunications and postal  services are regulated.  
27. North Macedonia notified the WTO that, during the period under review, it did not maintain any 
state trading enterprises as defined in paragraph 1 of the Understanding on the Interpretation 
of Article XVII of the GATT. State involv ement in the economy did not change significantly in 
recent years. There are currently 57 state -owned enterprises, of which 16, mostly public utilities, 
are wholly -owned by the State.  
28. In February 2017, North Macedonia submitted its application for accessi on to the WTO 
Agreement on Government Procurement. Its public procurement system is decentralized. Until 
31 March 2019, it was regulated by the Law on Public Procurement (LPP), which entered into 
force in 2008. A new Law on Public Procurement (new LPP), wh ich transposes several EU 
directives on public procurement, was adopted in January 2019 and entered into force on 1 April 
2019. While the general structure and content of the previous Law remain essentially the same, 
the new LPP introduces significant chan ges, including with respect to minimum thresholds for 
the application of procurement law, the publication of contract notices, the use of special 
procurement methods, and the criteria for awarding contracts. In the latter regard, the new LPP 
provides for t he possibility for quality to be evaluated in addition to price. As amended by the 
new LPP, the procurement regime does not provide for national preferences.  
29. While the number of public contracts awarded increased between 2013 and 2017, the value of 
public  contracts awarded in 2017 was inferior to the annual values awarded in each of the four 
previous years. The value of public contracts awarded to foreign suppliers decreased in both 
absolute and relative terms between 2013 and 2017.  
30. North Macedonia's lega l framework on intellectual property rights (IPRs) is quite comprehensive 
and has progressively been aligned with EU legislation. New legislation adopted during the review 
period, based on EU rules, includes the Law on Customs Measures for the Enforcement of 
Protection of IPRs and the Rulebook on the form and content for the request by right -holders for 
Customs to take action and for extending the period of such action. The Law on Copyright and 
Related Rights was amended in 2016 to regulate the functioning of the collective management 
of rights and fee distribution, and to eliminate a cap on right -holders' remuneration. The National 
Strategy on Industrial Property 2016 -18, adopted in October 2017, aims to guarantee a level of 
IPR protection in North Macedoni a like that of the European Union, to permanently harmonize it 
with all international obligations and agreements concluded by North Macedonia in this field, and 
to help develop an efficient IPR system as a backbone for economic growth. Although North 
Maced onia has a sound legal framework for the protection of IPRs, its practical effectiveness is 
limited by several institutional factors, for example, the absence of specialized courts, and the 
lack of coordination of IPR -enforcement bodies.  
31. Agriculture remain s an important activity for North Macedonia's economy, notwithstanding its 
declining shares in GDP and total employment. In 2018, the sector accounted for 8.4% of GDP 
and 15.7% of employment. The value of agricultural production increased during the review  
period in most product categories. North Macedonia exhibits a structural and growing trade 
deficit for agri -food products. The main agricultural exports in 2018 were tobacco; preparations 
of cereals, flour, starch or milk; beverages; edible vegetables and  certain roots and tubers; and 
preparations of vegetables, fruit, nuts or other parts of plants. The main import products in 2018 
were meat; miscellaneous edible preparations; dairy products; animal or vegetable fats and oils 
and their products; preparations of cereals, flour, starch or milk; and pastry cooks' products. WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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The main markets for agricultur e and food products are the European Union and neighbouring 
Western Balkan economies.  
32. The level of tariff protection in agriculture is relatively high. North Macedonia notified the 
Committee on Agriculture that it provided no export subsidies and no export credits to 
agricultural products for the calendar years 2008 to 2018. The structure o f support to agriculture 
remained relatively stable. Direct support to producers represented the largest share (60% in 
2015); followed by rural development measures (28%); and general support to agriculture 
(12%). North Macedonia does not apply any minimum  prices or any kind of market price support 
schemes. Its most recent domestic support notification to the Committee on Agriculture was for 
the calendar years 2005, 2006, and 2007. The National Strategy for Agriculture and Rural 
Development for the period 2 014-20 defines as its objective the improvement of the 
competitiveness of North Macedonia's agricultural production and food industry, the 
development of rural areas , and the sustainable management of natural resources.  
33. In 2016, mining and quarrying accoun ted for 1.2% of GDP. Of the 3 54 current concessions for 
mineral exploitation, around 13% are held by foreign companies . All three prospective geological 
research concessions are held by foreign companies.  
34. Oil and coal constitute the main primary energy su pply sources. In addition to national 
considerations, North Macedonia's energy policy aims to transpose the EU energy acquis  in terms 
not only of liberalization but also of energy security, energy efficiency and environmental 
objectives. During the period under review, regulatory regimes in gas and electricity were 
reformed by the new Energy Law of May 2018, which transposes the EU Third Energy Package. 
The Law fully unbundled the electricity sector and instated free choice of providers for all 
customers.  
35. The manufacturing sector accounts for slightly less than 20% of total employment. The increase 
in its contribution to GDP, from 11.8% in 2012 to 15% in 2018, mainly reflects the growth in 
value added of the category composed of motor vehicles, trailers and  semi-trailers. While North 
Macedonia managed to integrate successfully into certain global value chains, particularly in the 
automotive industry, significant challenges must be addressed to improve the competitiveness 
of the manufacturing sector. The new Industrial Strategy, with a focus on the manufacturing 
sector, adopted in 2018, emphasizes the critical role of manufacturing to economic growth, 
productivity, high -quality jobs, innovation, and promotion of the circular economy. Its overall 
objective is t o promote industrialization by stimulating the growth and development of the 
manufacturing sector to boost productivity, create good jobs, raise income, and strengthen 
human capital, while addressing the challenges of the circular economy.  
36. The telecommuni cations sector is largely liberalized and offers a dynamic competitive landscape, 
although prices remain relatively high by international standards. North Macedonia's main 
legislation in the field of telecommunications is the 2014 Law  on Electronic Communi cation, 
which reflects the regulatory framework for communications adopted by the European Union in 
2009.  
37. During the review period, North Macedonia adopted a series of by -laws aimed at strengthening 
the institutional and operational framework of banks, an d transposed several pieces of EU 
banking legislation. The main reform planned is the adoption, in 2020, of a special Law on 
Resolution, to transpose Dir ective 2014/59/EU on the establishment of a framework for recovery 
and resolution of credit institution s and investment firms.  North Macedonia transposed a series 
of pieces of legislation stemming from the EU insurance acquis,  notably the Risk -based 
Prudential and Solvency Rules for Insurers directive.  It also adopted various elements of the EU 
securities acquis . Regarding licensing procedures for securities market participants, 
amendments to the 2005 Law on Securities, to transpose the UCITS IV EU Package, were 
expected to be adopted by the Parliament in the first half of 2019 . North Macedonia is also 
planning to transpose, in the medium -term, the Hedge Funds and Private Equities directive (the 
AIFMD) and the Derivatives Regulation (the EMIR).  
38. The economic development of North Macedonia, as a small land -locked country, depends, to a 
large extent, on a well -developed transport network. To reduce transport costs arising from the 
relatively poor condition of roads and railways, the Government is focused on the development WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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of the transport infrastructure. Its aim is to better connect with the EU markets and acce ss the 
nearby sea ports in Greece and Bulgaria. In that respect, road infrastructure is an important 
priority, since most goods, including exports, are transported by road. North Macedonia 
transposed, in its 2013 Law on Road Transport, the main regulations  underpinning the single EU 
road transport market. North Macedonia also transposed a series of EU technical requirements 
on vehicles and the qualifications of drivers, and will soon transpose the latest EU tachymeter 
requirements. North Macedonia concluded  33 bilateral agreements on the international road 
transport of passengers and goods. It  is in the process of transposing the E uropean Union's  
Fourth Railway Package of 2016.  
39. Tourism is still a relatively minor activity in North Macedonia in terms of its contribution to GDP, 
but it developed, during the period under review, in terms of arrivals and gross foreign 
exchanges earnings. In 2017, the sector accounted for around 3.8% of total  employment, more 
than twice its share in GDP. In 2011, a non -discrimina tory subsidy programme aimed at 
increasing the capacity of tour operators and travel agencies was introduced, with a view to 
providing competitive holidays packages. The National Strategy for the Development of Tourism 
2018-23 is aimed, among several other  objectives, at developing tourism beyond the two main 
destinations of Skopje and Lake Orhid .  
  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 1  ECONOMIC ENVIRONMENT  
1.1  Main Features of the Economy  
The Republic of North Macedonia is a landlocked, middle -income country in the Balkan 
Peninsula. GDP growth during the period under review resulted in a reduction of unemployment and 
poverty, with GDP per capita rising by more than 40%. The services sector is the largest contributor 
to GDP, ac counting for 64% in 2018, followed by manufacturing (15%), agriculture, forestry and 
fishing (8.4%) and construction (7%). The informal sector remains relatively important (34% of 
GDP in 2014 and 18% of employment in 20161), which has a significant impact on productivity and 
on the business climate.  
Prudent macro -economic management resulted in low inflation (Table 1.1). As a result of being 
pegged to the euro, the exchange rate of the denar remained stable. State involvement in the 
economy has not evolved significantly since the large waves of privatization of the early 2000s. The 
central government budget ran a deficit during the whole period, albeit a declining one. This 
translated into an increase in public debt and, within it, external public debt, of m ore than 25% 
during the period (Table 1.1).  
As a small country of 2 million people, with a GDP of around EUR 11 billion, North Macedonia's 
internal market is not big enough to sustain high growth rates in the medium and long term. The 
country is dependent on trade, with exports and imports in goods and services representing around 
133% of GDP in 2018. North Macedonia's external trade prospects are closely and increasingly tied 
to the European Union, its largest trading partner. Its overall economic and stra tegic policy is geared 
towards unlocking further growth and productivity gains, stemming from progressive regional 
integration and regulatory convergence, through its accession process to the European Union.  
Foreign direct investment (FDI) inflows increas ed during the period and reached 
EUR 338 million in 2016, although they declined in 2017 to EUR 182 million before achieving a record 
high of EUR 624 million in 2018. GDP growth also rebounded from 0.2% in 2017 to 2.7% in 2018, 
and the International Moneta ry Fund (IMF) expects this trend to continue.  
1.2  Recent Economic Developments  
GDP growth averaged 2.2% on an annual basis from 2012 to 2018, and is expected to remain 
at this level in the medium term. Private consumption and public expenditures, notably in 
infrastructure, were the main drivers of growth during the period under review. The share of 
agriculture, forestry and fishing slightly declined between 2012 and 2018 (from 10.5% to 8.4%). By 
contrast, the contribution of manufacturing to GDP increased year after year, from 11.8% in 2012 
to 15% in 2018. This evolution can be explained by two factors. First, the traditional textile industry 
has managed to maintain its position within the European textile value chain despite the erosion of 
its low wages compara tive advantage. Second, in the automotive parts industry foreign investors 
have used the tax advantages offered by the technological industrial development zones to invest 
in new facilities producing automotive parts with a relatively high labour intensity . Within services, 
the group constituting distribution, transport, and food and accommodation services, all activities 
closely linked to private consumption, saw the largest increase of its contribution to GDP (from 
19.4% to 24.8%), while real estate under scored the largest decline (from 14.8% to 10.6%).  
GDP per capita increased from EUR 3,678.0 in 2012 to EUR 5,169.4 in 2018, and 
unemployment constantly declined during the period under review (from 31% in 2012 to 20.7% in 
2018). Consequently, poverty has n otably regressed.2 
                                                
1 World Bank, Systematic Country Diagnos tic, November 2018, footnote 65, pp. 53 and 34. Viewed at: 
http://pubdocs.worldbank.org/en/606381543434479145/MKD -SCD-2018-ENG-Web.pdf . 
2 According to the World Bank, between 2009 and 2015, the cumulative reduction in poverty was about 
12 percentage points (from 35% to 23%). Thus, it appears that, in six years, 24 0,000 people were lifted out of 
poverty. The World Bank further calculated that the decline continued through 2017. The extremely poor 
narrowed from about 9.7% in 2009 to 5.3% in 2015.  World Bank, Systematic Country Diagnos tic, 
November  2018, pp. 16 -17. Vi ewed at: http://pubdocs.worldbank.org/en/606381543434479145/MKD -SCD-
2018-ENG-Web.pdf . For a complete analysis on poverty indicators, see pp. 16 -36, and Annex 5, pp.  264-266. WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 Table 1.1 Selected macroeconomic indicators, 2012 -18 
  2012  2013  2014  2015  2016  2017  2018  
Nominal GDP (MKD billion)a 466.7  501.9  527.6  559.0  594.8  616.6  660.3  
Nominal GDP (EUR billion)a 7.6 8.1 8.6 9.1 9.7 10.0 10.7 
Real GDP (annual % change at constant 
2005 prices)  -0.5 2.9 3.6 3.9 2.8 0.2 2.7 
GDP per capita (EUR)  3,677.9  3,945.2  4,138.0  4,380.1  4,656.7  4,825.3  5,169.4  
Inflation (CPI, annual rate of change, in 
%) 3.3 2.8 -0.3 -0.3 -0.2 1.4 1.5 
Unemployment rate (share of labour force, 
year average)  31.0 29.0 28.0 26.1 23.7 22.4 20.7 
Population ('000)  2,062.3  2,065.8  2,069.2  2,071.3  2,073.7  2,075.3  2,076.6  
GDP by expenditure approach (% of 
GDP at current prices)a        
Final consumption  92.5 89.3 86.9 85.8 82.3 80.8 79.5 
Household final consumption, 
including non -profit institutions 
serving households  73.9 71.8 69.8 68.8 66.9 65.9 64.3 
General government final 
consumption  18.6 17.5 17.1 17.0 15.4 14.9 15.3 
Gross capital formation  28.9 28.8 30.3 30.4 32.5 33.0 33.0 
Net exports  -21.4 -18.1 -17.2 -16.3 -14.8 -13.8 -13.8 
Export of goods and services  45.4 43.4 47.7 48.7 50.7 55.4 60.4 
Import of goods and services  66.8 61.5 64.9 65.0 65.5 69.2 73.0 
GDP by economic activity (% of GDP 
at current basic prices)a        
Agriculture, forestry and fishing  10.5 11.5 11.7 11.1 10.6 9.1 8.4 
Mining and quarrying; manufacturing; 
electricity, gas, steam and air conditioning 
supply; water supply; sewerage, waste  
management and remediation activities  17.8 17.3 18.3 19.3 19.7 20.6 20.4 
of which: manufacturing  11.8 11.4 12.6 13.5 14.2 14.6 15.0 
Construction  6.6 8.2 8.0 8.1 8.0 7.2 7.0 
Wholesale and retail trade; repair of motor 
vehicles and motorcycles; transportation 
and storage; accommodation and food 
service activities  19.4 21.2 21.0 21.1 21.9 23.1 24.8 
Information and communication  4.0 3.7 3.5 3.4 3.5 3.9 3.4 
Financial and insurance activities  3.4 3.2 3.4 3.5 3.4 3.5 3.4 
Real estate activities  14.8 13.8 13.1 12.6 11.6 11.1 10.6 
Professional, scientific and technical 
activities; administrative and support 
service activities  3.7 3.7 3.7 3.7 3.9 4.2 4.6 
Public administration and defence; 
compulsory social security; education; 
human health and social work activities  17.2 14.7 14.2 14.2 14.3 14.0 13.6 
Arts, entertainment and recreation; other 
service activities; activities of households 
as employers; undifferentiated goods - and 
services -producing activities of households 
for own use  2.7 2.8 3.1 3.1 3.2 3.3 3.7 
Structure of national employment (% of total employment)  
Agriculture, forestry and fishing  17.3 18.7 18.5 17.9 16.6 16.2 15.7 
Mining and quarrying; manufacturing; 
electricity, gas, steam and air conditioning 
supply; water supply; sewerage, waste 
management and remediation activities  23.6 23.5 23.4 23.4 23.1 23.3 23.9 
of which: manufacturing  19.5 19.4 19.3 19.4 19.0 19.3 19.9 
Construction  6.3 6.9 7.0 7.1 7.2 7.2 7.4 
Wholesale and retail trade; repair of motor 
vehicles and motorcycles; transportation 
and storage; accommodation and food 
service activities  22.6 22.6 22.7 22.6 23.0 23.7 23.6 
Information and communication  1.7 1.6 2.0 2.1 1.9 1.8 1.7 
Financial and insurance activities  1.4 1.4 1.2 1.4 1.5 1.5 1.1 
Real estate activities  0.1 0.1 0.1 0.2 0.2 0.2 0.3 
Professional, scientific and technical 
activities; administrative and support 
service activities  4.1 3.7 3.9 3.4 3.8 3.7 4.2 
Public administration and defence; 
compulsory social security; education; 
Human health and social work activities  18.8 18.3 18.2 18.3 18.7 18.6 18.5 WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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   2012  2013  2014  2015  2016  2017  2018  
Arts, entertainment and recreation; other 
service activities; activities of households 
as employers; undifferentiated goods - and 
services -producing activities of households 
for own use  4.0 3.1 3.0 3.6 3.9 3.7 3.7 
Central government finance (% of GDP)  
Total revenue, of which:  29.6 27.9 27.7 28.8 28.5 29.1 28.5 
Tax revenue, of which:  16.2 15.4 15.9 16.3 16.6 16.7 17.3 
Personal income tax  2.0 2.0 2.3 2.3 2.4 2.5 2.7 
Value added tax  8.2 7.9 8.3 7.5 7.7 7.8 7.5 
Excises  3.6 3.2 3.3 3.5 3.7 3.7 3.8 
Custom duties  0.9 0.8 0.8 0.8 0.8 0.8 0.8 
Contributions  8.7 8.5 8.4 8.6 8.5 8.6 8.6 
Non-tax revenues  2.7 2.4 2.0 2.3 2.2 2.2 1.9 
Capital revenues  0.9 0.6 0.4 0.4 0.3 0.2 0.3 
Total expenditure  33.4 31.8 31.9 32.3 31.2 31.9 30.3 
Current expenditures, of which:  29.4 28.5 28.5 29.0 28.3 28.7 28.5 
Wages and salaries  4.9 4.5 4.4 4.4 4.4 4.2 4.0 
Goods and services  3.1 3.0 2.9 3.2 2.8 2.5 2.2 
Transfers, of which:  20.5 20.1 20.2 20.2 20.0 20.6 21.1 
Social transfers  14.9 14.8 14.9 14.8 15.0 15.4 15.2 
Interest payments  0.9 0.9 1.0 1.2 1.2 1.4 1.2 
Capital expenditures  4.0 3.3 3.3 3.3 2.9 3.2 1.8 
Budget deficit/surplus  -3.8 -3.8 -4.2 -3.5 -2.7 -2.7 -1.8 
Public debt (EUR million)  2,908.8  3,281.4  3,921.3  4,227.2  4,711.4  4,786.9  5,202.2  
% of GDP  38.4 40.3 45.8 46.6 48.8 47.8 48.5 
External public debt (% of GDP)  25.6 25.5 31.8 31.4 34.0 31.8 33.0 
Domestic public debt (% of GDP)  12.8 14.8 14.0 15.2 14.8 16.0 15.5 
External sector         
MKD/USD (annual average)  47.9 46.4 46.4 55.5 55.7 54.6 52.1 
MKD/EUR (annual average)  61.5 61.6 61.6 61.6 61.6 61.6 61.5 
Nominal effective exchange rate of MKDb 93.7 95.0 97.7 99.9 102.6  103.4  106.2  
Real effective exchange rate of MKDb 97.7 99.3 100.2  100.0  101.1  100.6  101.9  
Gross foreign reserves (stock, end of 
period , in EUR million)  2,193.3  1,993.0  2,436.5  2,261.8  2,613.4  2,336.3  2,867.1  
Import coverage, in months  5.2 4.8 5.3 4.6 4.9 4.0 4.4 
Gross external debt (public and private) 
(as % of GDP)  68.2 64.0 70.0 69.3 74.7 73.6 78.2c 
FDI inflow (EUR million)  111.2  252.2  205.1  216.7  338.4  181.7  624.5  
% of GDP  1.5 3.1 2.4 2.4 3.5 1.8 5.8 
FDI inward stock (EUR million)  3,685.5  3,980.0  4,023.6  4,400.1  4,657.3  4,697.8  .. 
% of GDP  48.6 48.8 47.0 48.5 48.2 46.9 .. 
Current account balance (%  GDP) -3.2 -1.6 -0.5 -2.0 -2.9 -1.0 -0.3 
Trade in goods and services (%  GDP) 112.2  104.9  112.6  113.7  116.2  124.6  133.4  
.. Not available.  
a Preliminary data for 2017, and estimated data for 2018.  
b Increase in index (2015=100) means appreciation.  
c As at the third quarter of 2018.  
Source:  Information provided by the authorities: the State Statistical Office, MakStat database. Viewed at: 
http://www.stat.g ov.mk/PoslednoObjavenoVoMakstat_en.aspx ; National Bank of the Republic of North 
Macedonia statistics online information. Viewed at: http://www.nbrm.mk/pocetna -en.nspx ; and Ministry of 
Finance statistica l information. Viewed at: https://www.finance.gov.mk/en/node/21 . 
However, growth was hampered by a lack of productivity gains. Overall, productivity is low, 
even by regional standards, and stagnated during the period under review. This is particularly true 
for the agricultural sector but extends also to manufacturing and services except for the export -
oriented, FDI -financed sectors and information technology.  
A recent World Bank report3 attributes th is low productivity to a suboptimal allocation of 
factors, including a lack of qualified skills, non -economically viable job support schemes, and the 
survival of laggard firms, reinforced by a poor investment climate due to political uncertainties during 
part of the period under review. The World Bank sees considerable potential in the improvement of 
                                                
3 World Bank, Systematic Country Diagnostic , November 2018. Viewed at: 
http://pubdocs.worldbank.org/en/606381543434479145/MKD -SCD-2018-ENG-Web.pdf . For a complete 
analysis on productivity, see pp. 38 -67. WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 productivity for supporting further gains in growth and the creation of high -quality jobs. The 
authorities concur globally with this analysis (Section 1.2. 4). 
1.2.1   Monetary and exchange rate policy  
The conduct of monetary policy is the remit of the National Bank of the Republic of North 
Macedonia. According to the law on the National Bank, the primary mission of the Bank is to  achieve 
and maintain price stability. An other of its mission is to contribute to the maintenance of a stable, 
competitive and market -based financial system. According to the authorities, the National Bank 
supports the general economic policies of the Government without jeopardizing the achieveme nt of 
its primary mission and in conformity with the principles of open market economy and free 
competition .  
The monetary policy instruments available to the National Bank to achieve its objectives are 
the management of the policy rate, the issuance of ce ntral banks bills, repo auctions, foreign 
exchange  intervention , temporary or outright purchasing or selling of securities, intraday, overnight 
and seven -day loan facilities, reserve requirements, and non -standard instruments.  
The denar is pegged to the eu ro. Therefore, during the period under review, the exchange 
rate between the two remained stable.  
The National Bank is also pursuing a cautious policy of de -euroization of the national economy; 
more than 40% of credits and deposits are denominated in euros. A new strategy for de -euroization 
was adopted in 2017. It includes higher reserve requirements f or deposits in euros and higher 
interest rates for those in denars.  
According to the IMF, during the period under review, the monetary policy stance has been 
mainly accommodative.  
1.2.2   Fiscal policy  
The central government budget ran a deficit during the period  under review, although this 
deficit narrowed after 2014 due to a decline in expenditures.  
As a result of these accumulated deficits, the public debt has constantly grown each year, 
from 38.4% of the GDP in 2012 to 47.8% in 2017, i.e. close to a 30% increa se in five years.  
This public debt partly reflects investment in road infrastructure and public construction 
projects but is mostly due to recurring primary deficits driven by declining tax revenues and rising 
current spending. As a result, according to t he IMF4 and to the World Bank5, notable risks to fiscal 
sustainability have built up over time in terms of high gross financing needs and the composition of 
public debt, with limited policy space to counter shocks and address long -term needs.  
The authoriti es broadly share this assessment and, in 2018, started implementing measures 
aimed at achieving a gradual fiscal consolidation. The first such measures are a reform of the pension 
fund system, and a reform aimed at targeting better social assistance.   
1.2.3   Structural issues  
The Government recently indicated6 that it was globally in agreement with the assessment of 
structural issues identified notably by the IMF and the World Bank, and on the need to increase 
productivity and inclusive growth. It also indica ted that, in 2018, it initiated a wide range of reforms 
aimed at addressing labour market weaknesses, combating informality, strengthening institutions, 
fighting against corruption and improving the efficiency and fairness of the tax system.  
                                                
4 IMF Country Report No. 19/32, 2018 Article IV Consultation , January 2019, pp. 16 -17. 
5 World Bank, Systematic Country Diagnos tic, November 2018, pp. 163 -164. Viewed at: 
http://pubdocs.worldbank.org/en/606381543434479145/MKD -SCD-2018-ENG-Web.pdf . 
6 IMF Country Report No. 19/32, 2018 Article IV Consultation , January 2019. Statement by the 
authorities.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 1.2.3.1   Tax and publi c financial management reform  
In order to reduce fiscal deficit, the 2019 budget introduced a second personal income tax 
rate of 18% that applies to the top 1% of earners. It also increased the threshold for tax -free 
allowance and the flat tax rate on capi tal income from 10% to 15%. According to the IMF, these 
measures are expected to have a positive net impact on the fiscal balance of 0.2% of GDP in 2019. 
Measures were also taken to limit VAT circumvention, close loopholes related to transfer pricing, and 
introduce pre -filled personal income tax forms.  
The reform of the pension system is aimed at improving its long -term sustainability by 
gradually increasing pension contribution rates from 18.0% to 18.8% in 2020, and by indexing 
benefit to the Consumer Pric e Index (CPI) only, instead of the present mixed formula (half average 
CPI and half average wage growth). Further measures may be considered in the future to address 
increasing demographic pressures. The reform of social assistance will improve targeting, and will 
increase the currently limited coverage, by consolidating the partially overlapping child and social 
protection benefits and creating both a guaranteed minimum income that is conditional on 
participation in activation programmes, and a social pens ion plan for the elderly to ensure a minimum 
revenue.  
The Government also started improving public financial management, notably by better 
monitoring and reducing government arrears, and by imposing, as of 2018, the quarterly publication 
for all public en tities of their overdue obligations. To achieve local government budget discipline, 
spending was capped. While hailing these efforts, the IMF, in the context of the 2018 Article IV 
Consultations, highlighted the importance of a more comprehensive fiscal co verage and revenue 
efficiency.  
1.2.3.2   Labour market  
Job creation during the period under review took place essentially in services, manufacturing 
and public administration. However, the new jobs were concentrated in less skill -intensive, less 
technologically sop histicated activities like wholesale trade, retail, and assembly manufacturing. In 
higher -value -added industries like financial services, information and communications technology 
(ICT), and telecoms, employment remained stable.7 
Long-term and youth unempl oyment rates are particularly high, reflecting skills shortages 
and qualifications mismatches. Large outward migration of skilled workers further exacerbates 
existing skill deficits and contributes to structural unemployment. In addition, about 35% of the 
working age population (15 to 64 years) is inactive, two thirds of which are women. A relatively 
large shadow economy employs about 18% of the labour force, but constitutes a drag on the 
economy, to the detriment of formal businesses, workers and the State , by perpetuating tax and 
social contribution evasion, uneven enforcement of business regulations, and gaps in labour 
inspection.  
To tackle these structural issues, the authorities are focusing on strengthening vocational 
training. They also intend to slo w the emigration of skilled labour, by adopting an industrial strategy, 
diversifying away from labour -intensive industries and attracting foreign investments in higher 
value -added industries that could generate jobs for the tertiary -educated and facilitate  technology 
transfer. To increase female labour force participation, a dozen new childcare centres were opened 
across different municipalities, with the number expected to double by end -2018. Recent measures 
aimed at combating informality include a lowerin g of the threshold for cash payments from 
EUR 1,000 to EUR 500 (applicable as of June 2018), the introduction of a voucher system to pay 
social contributions, and the establishment of a catalogue of all parafiscal charges, aimed at 
streamlining and limitin g the number of licences required to do business.   
1.2.3.3   Business environment  
In 2019, North Macedonia reached the tenth position in the World Bank "Doing Business" 
Index, ahead of 26 EU member States. While acknowledging this progress, the World Bank 
                                                
7 World Bank, Systematic Country Diagnos tic, November 2018, pp.48 -49. Viewed at: 
http://pubdocs.worldbank.org/en/606381543434479145/MKD -SCD-2018-ENG-Web.pdf . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
- 18 - 
 
 consider s, in its recent Systematic Country Diagnostic, that progress was slower in areas not covered 
by this Index, such as governance and accountability8, and that the political crisis in 2015 -2017 
underlined these problems. This opinion is shared by the IMF, wh ich considers that institutional 
weaknesses impose drags on the economy. T he need for improvement of the judicial and business 
environment s was also highlighted by the E uropean Union as one of the conditions for the opening 
of negotiations on North Macedon ia's accession.   
The authorities intend to tackle these structural impediments to unlock further growth 
potential through regional integration and regulatory practices convergence. Hence, they are 
planning to address outstanding recommendations made by th e Council of Europe and the Venice 
Commission in their latest review, through additional legislative amendments to the Law on the 
Judicial Council and the Law on Courts, to be ratified by Parliament in early 2019. New draft 
legislation on corruption preven tion aims to grant the State Commission for Prevention of Corruption 
access to the financial and banking information of public officials, and to a range of government 
databases, to strengthen oversight and facilitate asset verification.  
1.2.4   Balance of payment s  
During the period under review, the current account deficit narrowed from EUR 240 million 
(3.2% of GDP) in 2012 to EUR 31.9 million (0.3% of GDP) in 2018. This is due to both a reduction 
of the trade balance deficit and to an increased surplus of the se rvices balance.  
Both imports and exports of goods grew constantly during the period (save for one year, 
2013, for imports) and the growth rate of exports was more sustained. Hence, the deficit of the 
trade balance narrowed in absolute terms, from EUR  2,007 .9 million in 2012 to EUR 1,736.6 million 
in 2018. (Table 1.2)  
Table 1.2 Balance of payments, 2012 -18  
(EUR million)   
2012  2013  2014  2015  2016  2017a 2018a 
Current account  -240.0  -134.1  -43.2 -177.1  -275.5  -102.9  -31.9 
  Goods  -2,007.9  -1,863.3  -1,855.7  -1,822.8  -1,812.9  -1,787.9  -1,736.6  
     Credit  2,307.2  2,375.0  2,784.1  3,046.9  3,529.4  4,073.5  4,879.6  
     Debit 4,315.1  4,238.3  4,639.8  4,869.8  5,342.3  5,861.4  6,616.2  
  Services  309.4  374.9  383.9  348.8  340.7  377.0  357.8  
     Credit  1,066.8  1,154.7  1,303.9  1,377.6  1,389.7  1,439.3  1,566.6  
     Debit 757.4  779.8  920.0  1,028.8  1,049.0  1,062.3  1,208.9  
  Primary income  -163.8  -193.1  -160.6  -286.1  -383.9  -397.5  -450.5  
     Credit  146.7  170.9  158.0  150.5  147.1  147.1  152.9  
     Debit 310.5  363.9  318.6  436.6  531.0  544.6  603.3  
  Secondary income  1,622.3  1,547.3  1,589.2  1,583.0  1,580.6  1,705.5  1,797.3  
     Credit  1,694.2  1,624.3  1,675.4  1,672.9  1,681.8  1,833.0  1,934.4  
     Debit 71.9 77.0 86.2 89.9 101.2  127.5  137.0  
Capital account  9.3 14.7 3.3 7.3 10.7 18.0 6.9 
Financial account (net 
lending (+)/net 
borrowing ( -)) -212.1  -106.6  -27.2 -171.6  -272.3  -94.5 -7.5 
Direct investment  -131.1  -229.4  -197.4  -202.8  -316.9  -180.0  -621.9  
Portfolio investment  -77.3 159.3  -482.5  -65.7 -429.2  18.5 -320.3  
Financial derivatives 
(other than reserves) 
and employee stock 
options  0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Other investment  -146.1  7.5 243.9  280.3  135.6  213.0  384.4  
Reserve assets  142.3  -44.0 408.9  -183.4  338.2  -146.0  550.3  
Net errors and omissions  18.6 12.9 12.7 -1.7 -7.5 -9.6 17.6 
Note:  Based on Balance of Payments Manual, 6th edition.  
a Provisional.  
Source:  National Bank statistics online information. Viewed at: http://www.nbrm.mk/pocetna -en.nspx . 
                                                
8 For a more detailed analysis of this issue, see World Bank, Systematic Country Diagnostic , 
November  2018, pp. 152 -156. Viewed at: http://pubdocs.worldbank.org/en/6 06381543434479145/MKD -SCD-
2018-ENG-Web.pdf . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
- 19 - 
 
 
The services balance exhibited a surplus during the period under review, and an overall growth 
of this surplus (from EUR 309 million in 2012 to EUR 358 million in 2018). As a share of GDP, it 
declined slightly, from 4.1% to 3.3%. The growth of services exports is mainly due to construction, 
whose share increased (from 4.3% to 6.8%), computer services, whose share more than doubled 
(from 4.8% to 9.8%), and profession al services whose share grew by nearly 40% (from 5.9% to 
8.5%) (Table 1.3). By contrast, the relative share of telecom exports fell (from 5.2% to 1.4%), as 
did that of manufacturing on a fee or contract basis (from 27.9% to 16.7%), while the relative share  
of transport within services exports has remained virtually stable (24.0% in 2012, 24.9% in 2017).  
During the period under review, payments on account of repatriated profits and dividends 
rose, and these are reflected in the negative primary income balanc e. However, the secondary 
income surplus, which mainly comprises workers' remittances, increased during the period under 
review. Around 70% of the overall secondary income net inflows is attributable to the "other private 
transfers" category, which is main ly driven by cash exchanges (reflecting cash remittances, so -called 
"money under the mattresses", and hidden export receipts).  
The current account deficit was financed by the financial account, mainly by FDI inflows, which 
were robust throughout the revie w period. Gross foreign exchange reserves grew overall, from 
EUR 2,193 million in 2012 to EUR 2,867.1 million in 2018, with some variations in between, and the 
import coverage diminished from 5.2 months to 4.4 months.  
Table 1.3 Trade in services by sector, 2012, 2014, and 2016 -18 
 
2012  2014  2016  2017a 2018a 2012  2018  
 Value in EUR million  Share of total (%)  
Services exports  1,066.8  1,303.9  1,389.7  1,439.3  1,566.6  100 100 
Manufacturing services on physical 
inputs owned by others  297.6  338.6  267.2  242.0  261.1  27.9 16.7 
Maintenance and repair services 
n.i.e. 2.4 1.5 1.7 2.4 3.5 0.2 0.2 
   Transport  255.7  312.5  321.7  350.6  389.7  24.0 24.9 
       Air 15.0 19.1 27.5 31.2 35.9 1.4 2.3 
       Other modes of transport  239.0  290.7  291.7  316.8  351.2  22.4 22.4 
       Postal and courier services  1.7 2.7 2.5 2.7 2.6 0.2 0.2 
   Travel  183.1  221.9  252.5  286.7  324.8  17.2 20.7 
   Construction  45.7 102.0  145.2  133.1  106.1  4.3 6.8 
   Insurance and pension services  0.0 0.0 0.0 0.1 0.0 0.0 0.0 
   Financial services  2.0 3.3 2.6 3.4 4.0 0.2 0.3 
Charges for the use of intellectual 
property n.i.e.  6.4 7.9 7.0 8.6 9.9 0.6 0.6 
   Telecommunications, computer, 
and information services, of which:  106.0  121.3  150.0  154.5  183.0  9.9 11.7 
       Telecommunications services  55.0 60.9 53.3 26.6 22.2 5.2 1.4 
       Computer services  50.9 58.6 93.1 122.4  153.5  4.8 9.8 
   Other business services, of 
which:  147.7  167.4  210.4  224.6  250.1  13.8 16.0 
Professional and management 
consulting services  63.4 79.6 107.0  117.2  132.6  5.9 8.5 
   Technical, trade -related, and other 
business services  79.1 82.0 98.6 102.7  113.4  7.4 7.2 
   Personal, cultural, and recreational 
services  15.7 23.0 28.1 29.8 28.6 1.5 1.8 
   Government goods and services 
n.i.e. 4.5 4.3 3.3 3.5 5.8 0.4 0.4 
Services imports  757.4  920.0  1,049.0  1,062.3  1,208.9  100 100 
Manufacturing services on physical 
inputs  owned by others  0.1 -1.1 0.1 0.3 0.9 0.0 0.1 
Maintenance and repair services 
n.i.e. 4.1 4.3 6.2 8.7 11.6 0.5 1.0 
   Transport  286.5  301.5  273.2  309.6  329.4  37.8 27.2 
       Sea 40.1 44.3 32.3 57.8 30.2 5.3 2.5 
       Air 35.7 33.6 30.6 30.5 36.9 4.7 3.1 
       Other modes of transport  208.6  221.0  207.0  217.9  259.7  27.5 21.5 
       Postal and courier services  2.1 2.6 3.2 3.4 2.6 0.3 0.2 
   Travel  87.0 111.9  162.5  183.1  219.7  11.5 18.2 
   Construction  37.8 142.9  186.5  145.0  104.7  5.0 8.7 
   Insurance and pension services  4.2 4.6 5.1 6.1 6.7 0.6 0.6 
   Financial services  20.6 31.1 32.9 30.2 24.9 2.7 2.1 
Charges for the use of intellectual 
property n.i.e.  26.4 40.1 60.3 47.3 165.0  3.5 13.7 WT/TPR/S/ 390 • The Republic of North Macedonia  
 
- 20 - 
 
  
2012  2014  2016  2017a 2018a 2012  2018  
 Value in EUR million  Share of total (%)  
   Telecommunications, computer, 
and information services, of which:  55.8 67.0 74.7 86.8 89.9 7.4 7.4 
       Telecommunications services  19.8 32.8 30.8 32.9 34.1 2.6 2.8 
       Computer services  35.9 31.8 41.3 50.9 54.1 4.7 4.5 
   Other business services, of 
which:  188.3  167.3  204.9  206.4  215.3  24.9 17.8 
       Professional and management 
consulting services  97.2 90.9 124.0  103.9  117.7  12.8 9.7 
     Technical, trade -related, and other 
business services  86.5 71.3 73.3 96.6 93.8 11.4 7.8 
   Personal, cultural, and recreational 
services  21.3 27.8 22.5 20.9 22.7 2.8 1.9 
   Government goods and services 
n.i.e. 25.3 22.7 20.0 18.0 18.1 3.3 1.5 
a Provisional.  
Source:  WTO Secretariat calculations, based on National Bank statistics online information. Viewed at: 
http://www.nbrm.mk/pocetna -en.nspx . 
1.3  Developments in Trade and Investment  
During the period under review, the share in GDP of both merchandise exports and imports 
rose; that of exports increased from 30.4% in 2012 to 45.5% in 2018, while that of imports rose 
from 56.9% to 61.6%. The trend was similar for services, albeit at a slower pace, from 14.0% to 
14.6% f or services exports and from 10.0% to 11.3% for services imports.  
FDI net inflows rose from approximately EUR 131.0 million in 2012 (i.e. 1.5% of GDP) to 
EUR 621.9 million in 2018 (5.8% of GDP). Following the resolution of the name issue and the ensuing 
improved business climate, both the National Bank and the IMF forecast a significant rebound of 
FDI. The new Law of Financial Support for Investments, adopted in April  2018, which contains 
additional incentives, should foster this rebound (Sections 2.4 and 3 .3.2).  
1.3.1   Trends and patterns in merchandise trade  
The structure of exports (Chart 1.1) from North Macedonia evolved significantly during the 
period under review. While base metals and article thereof, and textiles and textile articles were the 
largest exports in 2012, with, respectively, 23.8% and 16.4% o f the total, in 2018, they were the 
third and fourth largest exports, with a share of 11.7% and 8.8%, respectively. The two largest 
exports are now machinery and electrical equipment (26.3% up from 8.8%) and chemicals (23.2% 
up from 15.5%). This reveals th e progressive decline of textile exports and the rise of auto and 
machinery components, for which North Macedonia successfully integrated European value chains.  
The structure of imports (Chart 1.1) remained more stable, the only two significant evolutions  
being the decline of the relative share of minerals products, from 24.2% to 11.3% (due to lower 
primary products and energy prices, and to much lower imports by volume of crude oil after the 
closure of the only refinery in the country), and the rise of th at of machinery and electrical equipment 
(from 11.5% to 17.4%), reflecting, as above, North Macedonia's integration into the global 
automotive value chain.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
- 21 - 
 
 Chart 1.1 Product composition of merchandise trade b y HS section, 2012 and 2018  
 
Source:  WTO Secretariat calculations, based on Republic of North Macedonia, State Statistical Office's 
MaKStat Database. Viewed at: http://www.stat.gov.m k/PoslednoObjavenoVoMakstat_en.aspx . 
The European Union is by far North Macedonia's largest export market (Chart 1.2), increasing 
from 65.3% in 2012 to 82.0% in 2018. Central European Free Trade Agreement (CEFTA) countries 
held a declining distant second p osition (22.0% in 2012, 11.1% in 2018). The share of other 
European countries remained quasi -constant (2.5% in 2012, 2.1% in 2018), while that of Asia and 
others, including United States, declined (Table A1.3).  
The sources of imports (Chart 1.2) remained m ore stable. There too, the European Union’s 
relative share came first and increased, but from a lower base and only slightly (from 60.3% to 
Chart 1.[MKD]
Product composition of merchandise trade by HS section, 2012 and 2018
2012 2018
Transport 
equipment
5.5%
Prepared food, 
beverages and 
tobacco
6.4%
Mineral 
products
6.1%
Chemicals 
23.2%
Textiles and textile 
articles
8.8%Base metals &
articles thereof
11.7%Machinery; 
electrical 
equipment
26.3%Other
12.0%
Total:   EUR 3.1 billion Total:  EUR 5.9 billion  
Base metals & 
articles thereof
9.6%
Mineral 
products
24.2%
Chemicals
8.7%Textiles and 
textile 
articles
7.8%Articles of 
stone, plaster, 
cement
2.2%Precious stones 
and metals, 
pearls
6.3%Prepared food, 
beverages and 
tobacco
5.0%
Mineral 
products
11.3%
Chemicals
9.1%
Plastics & 
rubber
5.0% Textiles and 
textile 
articles
7.1%Articles of 
stone, plaster, 
cement
5.7%Precious stones 
and metals, 
pearls
11.9%Base metals 
& articles 
thereof
10.0%Machinery;
electrical 
equipment
17.4%Transport
equipment
4.9%Other 
13.3%Textiles and textile 
articles
16.4%
Total:   EUR 5.1 billion Total:   EUR 7.7 billion 
WTO Secretariat calculations, based on Republic of North Macedonia, State Statistical Office's MAKStat 
Database. Viewed at: http://www.stat.gov.mk/PoslednoObjavenoVoMakstat_en.aspx [Feb. 2018].Other 
14.7%Base metals &
articles thereof
23.8%Prepared food, 
beverages and 
tobacco
10.0%Other
12.8%
Transport
equipment
4.4%Mineral 
products
11.6%Machinery; 
electrical 
equipment
8.8%
Machinery;
electrical equipment
11.5% 
Plastics & 
rubber
4.6% Prepared food, 
beverages and 
tobacco
5.9%Chemicals 
15.5%Exports (f.o.b.) 
Imports (c.i.f.) 
Source:Transport 
equipment
1.2%WT/TPR/S/ 390 • The Republic of North Macedonia  
 
- 22 - 
 
 62.4%). The Russian Federation's share declined, whereas that of United States improved. CEFTA's 
and China's shares remained quasi -stable (Table A1.4).  
Chart 1.2 Direction of merchandise trade, 2012 and 2018  
 
Note Croatia was counted in the EU -28, although it only acceded to the European Union on 1 July 2013.  
Source:  WTO Secretariat calculations, based on the State Statistical Office, MakStat Database. Viewed at: 
http://www.stat.gov.mk/PoslednoObjavenoVoMakstat_en.aspx . 
Chart 1.[MKD]  Direction of merchandise trade, 2012 and 2018
2012 2018
Exports (f.o.b.) 
Asia
6.6%
Europe
95.2%
EU-28
82.0%CEFTA
11.1%Other Europe
2.1%Asia
1.7%Other
3.1%
Total:   EUR 3.1 billion Total:  EUR 5.9 billion
EU-28
60.3%Russian Federation
5.5%United States
1.3%Other
4.4%
Europe
77.1%
CEFTA 9.5%Other Europe
7.3%China
5.7%
Europe
76.8%
EU-28
62.4%CEFTA 8.9%Other Europe
5.6%Russian 
Federation
1.4%South Africa 
3.3%
Asia
11.0%China
5.8%Other Asia   
5.2%Other
4.7%United States
2.7%
Total:   EUR 5.1 billion Total:   EUR 7.7 billionOther Europe
2.5%
Europe
89.7%
South Africa 
0.1%EU-28
65.3%
Other Asia   
5.9%Other
3.7%
Asia
11.6%Imports (c.i.f.) 
Source: WTO calculations, based on Republic of North Macedonia, State Statistical Office's MAKStat Database. 
Viewed at: http://www.stat.gov.mk/PoslednoObjavenoVoMakstat_en.aspx 
[Fen. 2019].CEFTA
22.0%
Note: Croatia was counted in the EU -28 although the country became the EU member country on 1st July 2013.WT/TPR/S/ 390 • The Republic of North Macedonia  
 
- 23 - 
 
 1.3.2   Trends and patterns in FDI  
Sustained FDI inflows during the period under review increased the FDI stock by 27% 
(Table  1.4). In terms of origin, the European Union remains, by far, the largest investor, though 
with a slightly declining share (81.5% in 2012, 76.7% in 2017). It is fol lowed by Turkey (3.9% in 
2012, 5.4% in 2017) and Switzerland (2.4% in 2012, 3.9% in 2017). China, who was not present 
in 2012, now holds fourth place, with 2.3%.  
Services are the first economic sector in terms of FDI stocks, though with a declining share 
(48.1% in 2012, 45.2% in 2017). Financial services (24.2% in 2012, 20.5% in 2017) and distribution 
(12.3% in 2012, 14% in 2017) are the two largest sub -sectors.  
Manufacturing is the second sector in terms of FDI stocks, and its share increased (34.8% in 
2012, 36.6% in 2017). This progression is largely due to vehicles and other transport equipment, 
whose sub -share more than doubled (7.2% in 2012, 15.7% in 2017). Energy and construction come 
third and fourth, and their respective shares increased due to recen t infrastructural investments.  
Table 1.4 FDI inward stock, 2012 -17 
 
2012  2013  2014  2015  2016  2017  2012  2017  
 Value in EUR million  % of total  
Total  3,685.5  3,980.0  4,023.6  4,400.1  4,657.3  4,697.8  100 100 
By major origins           
     EU-28a 3,003.1  3,355.2  3,282.8  3,472.8  3,605.1  3,602.2  81.5 76.7 
     Turkey  145.3  168.1  182.1  214.6  247.8  252.3  3.9 5.4 
     Switzerland  88.5 72.0 173.8  152.1  179.6  184.4  2.4 3.9 
     China  1.3 1.0 -3.1 10.2 36.7 110.1  0.0 2.3 
By sector           
Agriculture, forestry and 
fishing  36.5 42.9 43.6 43.8 46.4 23.8 1.0 0.5 
Mining and quarrying  156.4  164.8  182.3  119.3  116.7  77.0 4.2 1.6 
Manufacturing, of which:  1,281.5  1,388.9  1,435.8  1,563.7  1,685.6  1,718.0  34.8 36.6 
Vehicles and other 
transport equipment  264.5  360.7  449.9  557.6  655.9  736.6  7.2 15.7 
      Basic metals and 
fabricated metal products  392.7  378.5  362.6  338.2  284.3  260.4  10.7 5.5 
Food products, beverages 
and tobacco products  261.1  250.3  240.4  263.0  265.5  248.7  7.1 5.3 
Textiles and wearing 
apparel  74.4 89.5 90.4 96.9 146.6  150.7  2.0 3.2 
Electricity, gas, steam and air 
conditioning supply  278.8  296.5  327.7  327.4  365.2  380.7  7.6 8.1 
Water supply; sewerage, 
waste management and 
remediation activities  2.9 2.2 2.3 4.3 4.4 2.8 0.1 0.1 
Construction  157.1  199.1  201.3  231.2  337.6  371.0  4.3 7.9 
Services  1,772.2  1,885.5  1,830.6  2,109.3  2,100.3  2,124.6  48.1 45.2 
Wholesale and retail 
trade; repair of motor 
vehicles and motorcycles  453.9  489.4  505.3  706.4  666.0  658.2  12.3 14.0 
     Transportation and 
storage  39.0 41.0 39.6 39.4 34.5 30.1 1.1 0.6 
     Accommodation and food 
service activities  41.5 35.4 32.8 43.9 42.0 40.2 1.1 0.9 
     Information and 
communication, of which:  158.3  171.9  165.8  174.4  158.4  153.4  4.3 3.3 
         Telecommunications  129.1  140.4  134.3  143.3  124.3  116.0  3.5 2.5 
Financial and insurance 
activities, of which:  890.2  922.6  862.2  902.8  925.1  964.5  24.2 20.5 
         Financial 
intermediation  815.9  841.7  774.1  808.2  827.6  862.5  22.1 18.4 
     Other services  189.3  225.2  224.8  242.4  274.2  278.0  5.1 5.9 
Non- allocated  0.1 0.0 0.0 1.2 1.2 0.0 0.0 0.0 
a Croatia was counted in the EU -28, although the country only acceded to the European Union on 
1 July 2013.  
Source:  WTO Secretariat calculations, based on National Bank statistics online information. Viewed at: 
http://www.nbrm.mk/pocetna -en.nspx .  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 2  TRADE AND INVESTMENT REGIMES  
2.1  General Framework  
The Republic of North Macedonia has been a parliamentary democracy since 1991, when it 
declared its independence from the former Socialist Federal Republic of Yugoslavia and adopted its 
own Constitution. The country was renamed the Republic of North Macedonia, through the conclusion 
of the Prespa  Agreement, signed with Greece on 17 June 2018.1 After ratification by the parliaments 
of both countries, the Agreement came into force on 12 February 2019, and the Government of 
North Macedonia made the necessary constitutional amendments to reflect this new situation. The 
resolution of the name issue sets the conditions for a new phase in the transformation of North 
Macedonia's economy and its integration into the regional and global economy.  
The President of the Republic of North Macedonia is the Head o f State2, while executive power 
is exercised by the Government, headed by the Prime Minister.3 The current Government is formed 
by a coalition of parties. It proposes the budget, laws and regulations for adoption by the legislature, 
and issues decrees and other regulations needed for the implementation of laws. Ministries perform 
their tasks pursuant to the Constitution and laws, and are accountable to the Government.  
The legislative power is vested in a unicameral Assembly, which consists of 120 members 
elected by proportional representation. The judicial system is composed of the Supreme Court, which 
is the highest court, the Constitutional Court, the courts of Appeal, the constitutional courts, the 
Administrative Court, and the basic courts. The 22 Supre me Court judges and the Constitutional 
Court judges are nominated by a Judicial Council and appointed by the Assembly. The legal system 
is based on civil law.  
North Macedonia's Program of Government for 2017 -2020 focuses its reform agenda on the 
achievemen t of, inter alia , economic development, job creation, higher living standards of the 
population, a fairer taxation system, enhanced support for domestic enterprises, the rule of law and 
justice, efficient institutions, high -quality education and health sys tems, and the improvement of 
the country's international reputation and standing.4 The Program also establishes membership of 
the European Union as one of North Macedonia's strategic priorities . 
The pursuit of EU integration has been one of the main drivin g forces for the legal, institutional 
and economic reforms undertaken so far by North Macedonia. For more than a decade, the 
authorities have engaged in the process of aligning national legislation with EU law ( acquis 
communautaire ). In the area of foreign  trade, this has entailed the reform of almost all trade -related 
legislation, with notable progress in the areas of customs, most aspects of trade policy in goods and 
services, public procurement, taxation, and transport. During the period under review, fu rther 
progress was made in areas such as company law, competition, energy, trans -European networks, 
and science and research.5  
2.2  Trade Policy Formulation and Objectives  
The responsibility for formulating and implementing foreign trade policy and other trade -related 
policies rests mainly with the Ministry of Economy, working in collaboration with the Ministry of 
Finance and other ministries. The Ministry of Economy is in charge of negotiating, concluding and 
signing trade treaties and other trade -related agre ements with third countries. The Ministry of 
Finance is responsible for cooperation with international financial institutions, and for the formulation 
of policies relating to banking, credit, foreign exchange, and customs.  
                                                
1 The Prespa Agreement's full name is the Final Agreement for the settlement of the differences as 
described in the United Nations Security Council Resolutions 817 (1993) and 845 (1993), the termination of 
the In terim Accord of 1995, and the establishment of a Strategic Partnership between the Parties . 
2 The President is elected by a two -round system for a five -year term, renewable only once.  
3 The Prime Minister is appointed by the President for four years.  
4 Program of Government 2017 -2020. Viewed at: https://vlada.mk/node/14647?ln=en -gb. 
5 European Commission, Key findings of the 2018 Report on the former Yugoslav Republic of Macedonia , 
17 April 2018; and Key Findings of the 2016 Report on the former Yugoslav Republic of Macedonia,  
9 November 2016, European Commission – Fact sheets. Viewed at: https://ec.europa.eu/neigh bourhood -
enlargement/news_corner/press -releases_en . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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The Customs Administration, a se parate legal entity within the Ministry of Finance, has 
competence for the implementation of legislation on customs matters, including the collection of 
import tariffs and excise duties. The Agency for Foreign Investment and Export Promotion is in 
charge o f the implementation of strategies to promote exports and to attract foreign direct 
investment into the country. The Ministry of Agriculture is responsible for policies and measures 
pertaining to the import and export of agricultural products. The promotio n of the tourism and 
catering industries falls within the purview of the Ministry of Economy.  
The authorities are committed to strengthening public -private dialogue to improve the 
participation of businesses and other stakeholders in the legislative and po licy-making process. 
Several institutional channels have been set up to that end. Besides the chambers and business 
associations, one important channel is the National Committee on Trade Facilitation (NCTF), which 
was created in October 2017 and became ope rational in March 2018.6 The NCTF is mandated to 
facilitate domestic coordination in matters pertaining to trade facilitation , and to implement the 
provisions of the WTO Trade Facilitation Agreement (TFA) in cooperation with all entities involved in 
cross-border trade. The Committee is composed of 22 institutions (nine ministries, four agencies 
and bureau x, three inspectorates, and six business chambers and associations).7 
Another channel for private sector involvement is the Unique National Electronic Regi ster of 
Regulations (ENER), set up in 2009 and managed by the Ministry of Information Society and Public 
Administration. The ENER e -portal ( www.ener.gov.mk ) enables the business community and the 
public at large to en gage in the legislative process, by having access to all proposed legislation and 
the opportunity to make comments. Government officials at the ministries proposing new legislation, 
or amendments or supplements to existing legislation, must publish it and reply to all comments 
received, together with the reasons why a comment is accepted or declined.8  
There are no specialized commercial courts within the national judicial system. However, 
pursuant to the Law on Courts, some courts have been established with extended jurisdiction to 
decide upon trade -related disputes and cases of copyright and industrial property rights, among 
other issues. The right of appeal against legal acts brought in a court or an administrative procedure 
is enshrined in the Constit ution (Article 15). Appeals against customs and other government 
decisions on matters covered by the WTO agreements must follow the general rules for appeal 
established in the Law on Administrative Procedure. The Administrative Court has competence over 
disputes arising from the implementation and enforcement of public procurement and concessions 
contracts. The same treatment is granted to domestic and foreign parties in appeal procedures.  
During the period under review, North Macedonia continued its effort s to improve the 
functioning of its courts and the overall judicial system, to bring it in line with EU standards, as well 
as to enhance the country's attractiveness as an investment destination. It appears that progress 
has been achieved in this area, in particular regarding measures taken to strengthen the 
independence of the judiciary, including the establishment of a Special Prosecutor Office in 2016, 
the adoption of a new strategy for judicial reform (2017 -2022) and its action plan in 2017, and 
amendme nts to relevant pieces of legislation.9  
2.3  Trade Agreements and Arrangements  
2.3.1   WTO  
The Republic of North Macedonia has been a Member of the WTO since 2003. The country's 
accession commitments were implemented within the agreed transition period, which ended in  2012. 
The country grants at least MFN treatment to all its trading partners. North Macedonia's trade policies 
were reviewed once, in 2013.  
                                                
6 Official Gazette No. 140/17, 4 October 2017.  
7 The National Council for Entrepreneurship and Competitiveness (NECC) mentioned in the previous 
Secretariat's TPR report is no longer operating.  
8 There are  two e -portals run by the private sector which provide information on laws and regulations 
that directly affect business conditions ( www.e -demokratija.gov.mk , and www.biznisregulativa.mk ). 
9 European Commissi on, Key findings of the 2018 Report on the former Yugoslav Republic of Macedonia , 
17 April 2018. Viewed at: https://ec.europa.eu/neighbourhood -enlargement/news_cor ner/press -releases_en . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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North Macedonia accepted the Protocol Amending the Agreement on Trade -Related Aspects 
of Intellectual Property Righ ts (TRIPS) in March 2010, and the Protocol concerning the Trade 
Facilitation Agreement in October  2015. It is a signatory to the Agreement on Trade in Civil Aircraft. 
In keeping with its WTO accession obligations, in March 2017, North Macedonia applied for  accession 
to the Government Procurement Agreement10 and, in February 2018, it circulated its initial market 
access offer.11  
As regards WTO transparency obligations, North Macedonia's laws and regulations are 
published prior to entry into force, pursuant to  Article 52 of the Constitution. They are published in 
the Official Gazette no later than seven days after enactment, and come into force at the earliest on 
the eighth day following their publication. North Macedonia has regularly notified the WTO of the 
trade measures it has adopted since its previous Review in 2013; however, some notifications are 
still pending, including on domestic support for agricultural products (Table A2.1).  
Since its accession to the WTO, North Macedonia has not been involved in an y proceedings 
under the WTO dispute settlement mechanism.  
North Macedonia is a strong supporter of the rules -based multilateral trading system 
embodied in the WTO, which, it considers, gives greater certainty in trade relations, especially for 
small count ries, and contributes to promoting open trade, global economic growth and job creation.12 
Along with some 40 WTO Members, North Macedonia has expressed concerns about increased trade 
tensions, and called on WTO Members to refrain from taking protectionist m easures, and to avoid 
risks of escalation. Concerning the WTO's dispute settlement mechanism, it has emphasized the 
importance of filling the vacancies on the Appellate Body without delay.13 
As a landlocked country, North Macedonia has a keen interest in th e full implementation of 
the Trade Facilitation Agreement (TFA), which it expects will help facilitate transit procedures and 
reduce trading costs. Accordingly, the country committed to apply almost all the TFA provisions upon 
the entry into force of the A greement (March 2017).14 At the Eleventh WTO Ministerial Conference 
in Buenos Aires  (December 2017), r ecognizing the need to keep pace with the developments in the 
global economy, North Macedonia co -sponsored the initiatives to continue work on e -commerce a nd 
on domestic regulation on services, as well as to create an informal Working Group on Micro, Small 
and Medium Enterprises (MSMEs) at the WTO.15 Regarding the topics of the Doha Development 
Agenda, North Macedonia has traditionally supported agricultural reform in all three pillars (market 
access, domestic support and export subsidies), and shares the position of the recently -acceded 
Members (Article XII Members) that such Members should not be asked to undertaken reduction 
commitments in all three pillars .16 Likewise, in non -agricultural market access, the country supports 
the Article XII Members' position that they should be excluded from further tariff reductions, 
considering the substantial market access commitments undertaken during accession, and it to ok a 
similar position in the services negotiations. Regarding the TRIPS Agreement, North Macedonia 
supports the protection of biodiversity and traditional knowledge, and a higher level of protection 
for products with geographical indications.  
2.3.2   Regional and  preferential agreements  
North Macedonia is a party to five free trade agreements (FTAs). It concluded agreements 
with the European Union, the European Free Trade Association (EFTA) and the Central European 
Free Trade Agreement (CEFTA), and two bilateral a greements with Turkey and Ukraine. These 
agreements provide the overall framework for the country's regional cooperation and deeper 
integration into European economic and political processes. All five agreements were notified to the 
WTO and four of them we re considered by the Committee  on Regional Trade Agreements.17 At the 
                                                
10 WTO document GPA/143, 17 March 2017.  
11 WTO document GPA/ACC/MKD/4, 28 February 2018.  
12 WTO document WT/MIN(17)/ST/66, 18 December 2017.  
13 WTO document WT/GC/192/Rev.1, 29 May 2018.  
14 North Macedonia notified as category A commitments all provisions of the TFA, except two. WTO 
documents WT/PCTF/N/MKD/1, 13 February 2015; and G/TFA/N/MKD/2, 30 January 2018.  
15 Joint Ministerial Statements, WT/MIN(17)/60, WT/MIN(17)/61, and WT/MIN(17)/58,  respectively, all 
dated 13 December 2017.  
16 Upon accession to the WTO, in the area of agriculture, North Macedonia committed to a very low level 
of domestic support, substantial market access, and to provide no export subsidies.  
17 For more details, see th e WTO's RTA database at: http://rtais.wto.org/ . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 time of writing this report, a draft factual presentation on the CEFTA had been prepared by the WTO 
Secretariat  and was being considered by the CEFTA parties.  
Most of North Macedonia's fo reign trade is carried out with its FTA partners. In 2018, 95% of 
the country's exports and 78% of its imports took place under the above -mentioned FTAs 
(Section  1.3.1).  
Stabilization and Association Agreement (SAA) with the European Union  
The SAA signed between North Macedonia and the E uropean Union is in force since April 2004 
and remains the main framework for their bilateral relationship.18 It aims to create a close, long -
term association between the two, and constitutes the legal instrument for North M acedonia's 
alignment to the EU acquis  and its progressive integration into the EU market. Article 68 of the SAA 
establishes the obligation to gradually approximate North Macedonian laws with those of the 
European Union,  and sets out as priority areas for h armonization with the internal market acquis  the 
following: competition law, public procurement law, standards and certification law, intellectual 
property law , and data protection law. The process of legal harmonization takes place within the 
framework of  the National Programme for the Adoption of the Acquis Communautaire , established 
in 2006 and revised every year, and through the EU Commission progress reports.  
With reference to trade, the SAA contains provisions on both goods and services. As stated in  
the parties' 2017 SAA implementation report, submitted to the WTO Committee on Regional Trade 
Agreements, two -way trade between the European Union and North Macedonia was completely 
liberalized over a maximum period of ten years.19 The pace of liberalizati on was asymmetric, with 
the European Union liberalizing at a faster rate. All EU imports of industrial and agricultural products 
(except for baby beef and wine) originating in North Macedonia were liberalized from the outset; 
only imports of fishery produc ts were subject to a tariff reduction over a period of three years. 
Imports into North Macedonia of industrial products originating in the European Union were 
liberalized over a ten -year period, whereas agricultural goods, processed agricultural products a nd 
fishery products were subject to a liberalization period of six years. Some goods were subject to 
tariff-rate quotas (TRQs): North Macedonia maintained TRQs on certain agricultural products (meat, 
butter, milk, cheese, citrus fruits, olives, maize, and sugar) and crude oil. The European Union 
maintained TRQs on baby -beef products. North Macedonia excluded some tariff lines from tariff 
concessions (such as some fruits and vegetables, and some processed agricultural products), and 
the European Union exclud ed wine, which is the object of a separate agreement. The SAA was 
amended to take into account further EU enlargements (2004, 2007 and 2013).  
The SAA provisions on trade in services cover all four modes of supply. The only excluded 
sectors are: air transpo rt, inland water transport, and maritime cabotage services. The SAA also 
includes provisions on, inter alia , rules of origin, export duties and restrictions, standards, trade 
defence instruments, investment, intellectual property, government procurement, c ompetition, 
environment, and cooperation on a wide range of activities. The Stabilisation and Association Council 
and Committee, established by the SAA, meet once a year to supervise the application and 
implementation of the Agreement.  
Resulting from the f ull implementation of the SAA, 97.9% of the EU -28 tariff lines on imports 
from North Macedonia were duty -free and quota -free as at 1 January 2014, covering 98.8% of total 
EU-28 imports from the country.20 At present, 90.5% of North Macedonia's tariff lines on imports 
from the EU -28 are duty -free. The European Union is North Macedonia's largest trading partner. In 
2018, the country's trade with the E uropean Union totalled EUR 9.6 billion, accounting for 82% of 
its exports and 62% of its imports.   
2.24.   North Macedo nia was granted candidate country status for EU membership in December 2005 
and has received positive recommendations from the European Commission to launch accession 
talks since 2009. In April 2018, the Commission recommended that the European Council dec ide 
that accession negotiations be opened with North Macedonia in light of the progress achieved and 
                                                
18 The text of the SAA can be viewed at: https://eeas.europa.eu/delegations/former -yugoslav -republic -
macedonia/14875/stabilisation -and-association -agreement -saa-between -european -communities -and-their-
member_en . 
19 WTO document WT/REG129/R/I, 2 2 August 2017.  
20 WTO document WT/REG129/R/I, 22 August 2017.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 in view of the sustained reform momentum.21 In June 2018, the European Union Council of Ministers 
agreed to respond positively to the recent progress made b y North Macedonia, particularly on the 
implementation of institutional reforms and the resolution of name issue with Greece, and set out 
the path towards opening accession negotiations in June 2019.22 
2.3.2.2   Free Trade Agreement with the European Free Trade Associ ation (EFTA)  
The FTA between North Macedonia and the EFTA States (Iceland, Liechtenstein, Norway and 
Switzerland) was signed in June 2000 and entered into force in May 2002. It covers trade in industrial 
products, including fish and marine products.23 Trade  in agricultural goods is regulated by separate 
bilateral agreements between each individual EFTA State and North Macedonia.  
EFTA imports of industrial products from North Macedonia were liberalized on the date of 
entry into force of the FTA, while import s into North Macedonia of industrial products originating in 
EFTA States were liberalized over a ten -year transition period; full liberalization of the industrial 
sector was achieved in January 2011.  
In addition, t he FTA contains disciplines relating to t he elimination of other trade barriers ; 
standards; competition  rules;  protection of intellectual property ; public procurement ; state 
monopolies ; state aid ; and payments and transfers. Rules regarding trade in services were left for 
future discussions. A Joint Committee established under the Agreement supervises its 
implementation .  
In 2018, exports from North Macedonia to EFTA States accounted for 0.7% of its total exports, 
while imports from them made up 0.9% of total imports. Total trade between EFTA States and North 
Macedonia was EUR 112.2 million.  
2.3.2.3   The Central European Free Trade Agreement (CEFTA)  
The CEFTA  was signed in December 2006 and entered into force across the various parties 
between July and November 2007.24 To date, its signatories are Albania, Bosnia and Herzegovina, 
the Republic of North Macedonia, Moldova, Montenegro, Serbia and Kosovo.25 The CEFTA aims, inter 
alia, to progressively establish a free trade area covering trade in goods and services, and foster 
investment and regional integration. The CEFTA is also expected to enhance individual countries' 
efforts towards EU accession. The Joint Committee, composed of representatives of each CEFTA 
party, is responsibl e for administering and supervis ing the implementation of the Agreement.  
Prior to the entry into force of the CEFTA 2006, North Macedonia had agreed to free trade in 
industrial and agricultural products wi th Serbia, Montenegro, and Bosnia and Herzegovina under 
pre-existing bilateral FTAs. Free trade was established with Kosovo  in January  2008 and with Albania 
in November 2011. An additional Protocol with Albania (effective 15 November 2011), and two 
protoco ls with Moldova (13 January 2012 and 4 March 2015) fully liberalized trade in agricultural 
products, some of which had been hitherto subject to quotas or regular import duties.26  
                                                
21 European Commission, Key findings of the 2018 Report on the former Yugoslav Republic of 
Macedonia , 17 April 2018. Viewed at: https://ec.europa.eu/neighbourhood -enlargement/news_corner/press -
releases_en . 
22 Conclusions of the 26 June 2018 EU General Council of Ministers, p.16. In this respect, the Council 
underlined the need for North Macedonia to continue to make progress on institutional reform, particularly with 
respect to "(i) judicial reforms and proact ive investigations, prosecutions and final convictions in corruption and 
organized crime cases, including at high level; (ii) intelligence and security services reform; (iii) public 
administration reform." For the complete text of the 26 June 2018 Conclusi ons of EU Council (general affairs) 
on North Macedonia, see: https://www.consilium.europa.eu/media/35863/st10555 -en18.pdf , pages 14 -16. 
23 The text of the Agreement can be viewed a t: http://www.efta.int/media/documents/legal -texts/free -
trade -relations/macedonia/EFTA -Macedonia%20Free%20Trade%20A greement.pdf . 
24 The CEFTA and its associated legal documents can be viewed at: http://cefta.int/legal -
documents/#1463498231136 -8f9d234f -15f9. 
25 All References to Kosovo in t his Report should be understood to be in the context of United Nations 
Security Council resolution 1244 (1999).  
26 The last remaining quotas on wine between North Macedonia and Moldova were eliminated in 
February and March 2015.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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Under CEFTA 2006, the parties achieved full liberalization of trade in indust rial and agricultural 
products in 2015. Other achievements include the mutual opening of public procurement markets, 
the review of CEFTA rules on intellectual property rights (Annex 7), and the implementation of a 
CEFTA Transparency Pack for the exchange o f information on trade measures such as technical 
barriers to trade , sanitary and phytosanitary measures,  market access and state aid , as well as the 
creation of the CEFTA Trade Portal.  
During the review period, further progress on CEFTA implementation was made in the 
following areas: application of full cumulation and removal of the prohibition of duty drawback among 
CEFTA countries; ongoing negotiations for the gradual liberalization of trade in services (a draft 
protocol was finalized); the conclusion o f an additional Protocol on Trade Facilitation in 2016 , which 
entered into force in 2018 for all CEFTA parties (except Kosovo) ; the identification of issues to be 
addressed for the potential development of regional agreements on investment; and the 
enhanc ement of c apacity building and transparency. Ratification of the Pan-Euro-Mediterranean 
(PEM) Convention was also a key outcome for CEFTA countries.  
In 2018, North Macedonia sent 11.1% of its total exports to other CEFTA parties , and received 
imported  8.9%  of its total imports from that group. The country's total trade with its CEFTA partners 
amounted to EUR 1.3 billion in that year.  
2.3.2.4   Free Trade Agreement with Turkey  
The FTA between North Macedonia and Turkey was signed in 1999 and entered into force in 
September 2000.27 Turkey removed all tariffs on industrial goods originating in North Macedonia 
upon the entry into force of the Agreement; and North Macedonia achieved the elimination of its 
tariffs on imports of industrial products originating in Turkey afte r a transition period, which ended 
in 2007. The liberalization of the industrial sector was completed as at January 2008. Regarding 
agricultural goods, special preferential treatment is granted by both parties in the form of tariff 
quotas.  
Two-way trade w ith Turkey amounted to EUR 442.4 million in 2018, representing 1.4% of 
North Macedonia's exports and 4.7% of its imports.  
2.3.2.5   Free Trade Agreement with Ukraine  
The FTA between North Macedonia and Ukraine was concluded in 2001 and entered into force 
in the sam e year.28 Under the Agreement, both parties committed to eliminate tariffs on each other's 
products in a gradual manner. Free trade in the industrial sector was established in 2009 , after a 
five-year transition period for sensitive products and seven years for the most sensitive industrial 
goods. Under a Decision signed on 30 May 2009, agricultural products subject to tariff quotas within 
the FTA were to be fully liberalized, while the remaining agricultural products were to  be subject to 
regular customs dut ies. The Decision has not yet come into effect. In May 2018, the two countries 
agreed to reopen negotiations in this respect , with the aim of achieving full liberalization of trade in 
agricultural and processed food products. The negotiations are ongoing.  
Bilateral trade between North Macedonia and Ukraine almost doubled in 2018, compared to 
the previous year, amounting to EUR 112.7 million. Imports into North Macedonia from Ukraine 
represented 1.4% of total imports, while exports to Ukraine made up only 0. 1% of total exports.  
2.3.3   Other agreements and arrangements  
North Macedonia is a beneficiary of the generalized systems of preferences (GSP) applied by 
Kazakhstan, New Zealand and the Russian Federation. It also benefits from the European Union's 
trade prefere nces for countries of the Western Balkans. The country is a member of the Global 
System of Trade Preferences among Developing Countries (GSTP).  
                                                
27 The text of the Agreement can be viewed at: 
https://wits.worldbank.org/GPTAD/PDF/archive/Macedonia -Turkey.pdf . 
28 The text of the Agreement can be viewed at: 
https://wits.worldbank.org/GPTAD/PDF/archive/FYROM%20 -%20Ukraine.pdf . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 2.4  Investment Regime  
Attracting foreign direct investment (FDI) remains a key component of the Government's 
strategic objectives of increasing competitiveness and achieving higher economic growth and 
development. The current Programme of Government establishes as one of its pr iorities the 
development of domestic enterprises' backward linkages with foreign companies operating in the 
country.  
Over the years, North Macedonia has been committed to improving the investment climate, 
and making it more stable and predictable,  to attr act higher levels of both domestic and foreign 
investment. These efforts have been recognized. For example, North Macedonia ranked 10th (out of 
190 economies) in the World Bank's Ease of Doing Business ranking in 2017, and 11th in 2018. In 
addition, among the top 20 rankings, the country implemented the second highest number of 
business regulation reforms since the early 2000s.29  
As a small and open economy, North Macedonia has also taken measures to increase its 
attractiveness to foreign investors, such as  the provision of financial and fiscal incentives, targeted 
investment promotion strategies, and the establishment of Technological Industrial Development 
Zones. It has adopted legislation that grants equal treatment to foreign investors in relation to the ir 
domestic counterparts, and has signed bilateral investment treaties, double taxation treaties and 
multilateral conventions that provide strong protection standards for foreign investors.   
The investment regime is generally open to FDI, with only a few legal restrictions: in domestic 
and international air transport and gambling, foreign ownership is limited to 49% of a firm's capital.30 
Foreign ownership of non -agricultural land is unrestricted for investors from EU countries , and is 
conditional on recipr ocity for investors from other countries; whereas access to agricultural land is 
only possible through leasehold. In practice, however, the maintenance of state -owned enterprises 
which are dominant in some business sectors such as electricity transmission,  railway transport and 
waste management , may constitute de facto  barriers to both foreign and domestic investments.31 
There is no specific law regulating foreign investment; the legal framework applicable to 
foreign investors is provided by various laws, in cluding the Constitution, the Law on Trading 
Companies, the Law on Foreign Exchange Operations, the Law on Expropriation, the Law on 
Technological Industrial Development Zones, the Law establishing the Agency for Foreign 
Investments and Export Promotion (k nown as Investment Macedonia), and a number of sectoral 
laws and international treaties.  
The Constitution guarantees equal rights for both national and foreign persons and legal 
entities when conducting economic activities in the country, except as otherw ise provided for by the 
law. Foreign investors may acquire property rights for buildings and other immovable assets used 
for their business activities, as well as full ownership rights over construction land , through a locally -
registered company.  
The Law on Trading Companies grants post -establishment national treatment of foreign firms 
(whether subsidiaries, branches or representative offices), unless otherwise stipulated by an 
international agreement and/or by a law regulating foreign companies with a spe cific scope of 
operations. The Law establishes five forms of trading companies: public trade (general partnership), 
limited partnership, limited liability company, joint stock company, and limited partnership by 
shares.  
The Law on Foreign  Exchange Operatio ns stipulates that foreign investors  are free to transfer 
abroad profits, proceeds from the disposal or sale of ownership shares in direct investment, and the 
remainder of a liquidated investment, provided they have registered their direct investments 
                                                
29 World Bank Group, Doing Business 2017  and Doing Business 2018 . Viewed at: 
http://www.doingbusiness.org/content/dam/doingBusiness/media/Annual -Reports/English/DB17 -Report.pdf , 
and http://www.doingbusiness.org/content/dam/doingBusiness/media/Annual -Reports/English/DB2018 -Full-
Report.pdf . 
30 UNCTAD (2017), Investment Policy Review. South -East Europe , United  Nations, Geneva. Viewed at: 
http://unctad.org/en/PublicationsLibrary/diaepcb2017d6_en.pdf . 
31 World Bank. Viewed at: http://iab.worldbank.org/Data/ExploreEconomies/macedonia -fyr#investing -
across -sectors . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 according to this Law, and have fulfilled all legal obligations regarding taxes and social insurance 
contributions  in North Macedonia.  The same Law requires foreign firms and non -residents to report 
their direct investments and all subsequent modifications to the Register of Direct Investments within 
60 days of the date of the capital transaction, and their acquisition of real estate to the Register of 
Investments in Immovable Property within 60 days of the purchase. Apart from these two 
requirements, establish ment procedures are the same for both national and foreign investors  in 
most economic sectors. While foreign exchange transactions of non -residents are liberalized, 
residents of North Macedonia are not allowed to open deposits accounts abroad (with certain  
exceptions), to buy real estate or to buy securities abroad which are not traded on foreign stock 
exchanges that have agreements with the country.32  
Expropriation is possible in instances of war, natural disaster, or for reasons of public interest. 
Accord ing to the Constitution and the Law on Expropriation, the State must pay rightful 
compensation, not lower than the market value of the expropriated property, plus interests due from 
the date of expropriation if the payment is not made within 15 days of the  decision on expropriation. 
The legislation does not refer to the issue of regulatory takings, but this matter is regulated by the 
country's bilateral investment treaties.  
The Law on Technological Industrial Development Zones (TIDZs) provides for special tax 
treatment, customs exemptions and other incentives to companies that will invest in the designated 
TIDZs (Section 3.2.4). The Law establishing the Agency for Foreign Investments and Export 
Promotion regulates the activities undertaken by Investment Mac edonia  to attract foreign 
investment and promote exports.  
A new development since the last TPR is the promulgation of the Law on Financial Support for 
Investments (LFSI) in May 2018. Its objective is to stimulate economic growth and increase 
employment and  competitiveness by fostering productive investment. It sets out different types of 
financial support measures for both domestic and foreign investments, including the amounts, 
eligibility conditions and requirements. Details about the forms of financial s upport are provided in 
Section 3.3.2.  
North Macedonia's institutional framework for investment includes several ministries and 
agencies. The Ministry of Economy and the Deputy Prime Minister responsible for economic affairs 
are in charge of  formulating investment policy. Invest Macedonia is the official agency responsible 
for developing and implementing strategies to attract FDI and promote exports. Its mission is to 
encourage and support new FDI into the country, establish and enhance busin ess cooperation with 
local suppliers , and foster the export potential of local companies. It functions as a single port of call 
for potential investors. The Directorate for Technological Industrial Development Zones is 
responsible for the management of the  country's special economic zones , and also plays an active 
role in investment promotion, particularly in the automotive components industry, which is the main 
activity within the TIDZ s. In addition, three ministers without portfolio s are engaged in FDI ma tters, 
and one is in charge of the Regulations for Improvement of the Investment Climate for Domestic 
Companies. All of them have responsibilities for executing a broad range of policies to secure 
business and investment opportunities in the country.  
At the regional level, North Macedonia and five other Western Balkan economies  (Albania, 
Bosnia and Herzegovina, Kosovo, Montenegro, and Ser bia) are working to harmonize national 
investment policies among them , using  EU standards and international best practice s. The Regional 
Investment Reform Agenda (RIRA), adopted in May 2018 in the context of the Multiannual Action 
Plan for a Regional Economic Area (MAP REA)33 and the CEFTA legal framework, sets out the  roadmap  
for creating a dynamic investment space in the six Western Balkan economies (WB6). The RIRA is 
intended to contribute and add value to national investment reform efforts , and ensure transparent 
and fair competition by mitigating a "race to the bottom" in attracting FDI among the WB6 
economies. The ultima te objective is to increase the attractiveness of the region for foreign and 
                                                
32 UNCTAD (2017), Investment Policy Review . South -East Europe , United Nations, Geneva. Viewed at: 
http://unctad.org/en/PublicationsLibrary/diaepcb2017d6_en.pdf . 
33 The MAP REA  was adopted in July 2017 in Trieste. It establishes a structured agenda for regional 
economic integration of the WB6 by promoting further trade integration, introducing a dynamic regional 
investment space, facilitating regional mobility, and creating a di gital integration agenda.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
- 32 - 
 
 intraregional businesses, and foster higher investment and trade flows, entrepreneurial activity and 
jobs.  
Based on the RIRA, North Macedonia adopted a National Investment Reform  Action Plan in 
January 2019. The Plan provides a detailed set of reform actions with specific implementation 
periods, lead agencies, expected outputs, and donor support that will be required to achieve the 
targets set out in the RIRA. The policy areas cov ered by the Plan include investment entry and 
establishment; investment protection and retention; and investment attraction and promotion 
(including streamlining incentives and improving their transparency and governance). The reform 
actions are to be impl emented by end -2020.  
North Macedonia is a signatory to 40 bilateral agreements for mutual protection and 
promotion of foreign investment, of which 35 are currently in force, including some with the country's 
main investment partners such as individual EU m ember States, China, Switzerland, the Russian 
Federation,  and Turkey. Since the previous TPR, new bilateral investment treaties (BITs) were 
concluded with Azerbaijan (2013), Vie t Nam (2014) and Denmark (2015), which have all entered 
into force.34 The bilate ral investment agreement with India was terminated in October 2018 , upon 
request of the Indian Government. The authorities plan to develop a Draft BIT Model for North 
Macedonia to be used in future negotiations.  
North Macedonia has concluded 39 treaties fo r avoiding double taxation with its main 
economic partners worldwide, most of which are in force.35 During the period under review, the 
country signed 11 new double taxation treaties (Azerbaijan, Belgium, Bosnia and Herzegovina, India, 
Iran, Kazakhstan, Kuw ait, Luxembourg, Morocco, the United Arab Emirates, and Saudi Arabia). The 
Republic of North Macedonia is also a party to the Convention on the Settlement of Investment 
Disputes between States and Nationals of Other States (ICSID Convention), the Conventio n 
Establishing the Multilateral Investment Guarantee Agency (MIGA), and the New York Convention 
on the Recognition and Enforcement of Foreign Arbitral Awards.  
  
                                                
34 For a list of BITs signed by North Macedonia, see UNCTAD online information. Viewed at: 
http://investmentpolicyhub.unctad.org/IIA/Countr yBits/124#iiaInnerMenu . 
35 For a list of North Macedonian double taxation treaties, see Ministry of Finance information. Viewed 
at: http://www.ujp.gov.mk/en/plakjanje/category/137?print =1. WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 3  TRADE POLICIES AND P RACTICES BY MEASURE  
3.1  Measures Directly Affecting Imports  
3.1.1   Customs procedures, valuation, and requirements  
3.1.1.1   Customs procedures and requirements  
The legal provisions regarding customs procedures and requirements in North Macedonia are 
set out in the Customs Code and several related legal acts and are implemented by  the Customs 
Administration.1 During the review period, North Macedonia continued to update and modernize its 
customs legislation, particularly with a view to achieving convergence with EU customs rules and 
improving the efficiency of the collection of imp ort duties and other taxes.  
North Macedonia maintains a system of registration for commercial importers. According to 
data provided by the authorities, 10,178 commercial importers had been registered at the end of 
2018.  
Under the Customs Code and the Customs Code Implementing Provisions, the customs 
declaration is the primary document to be lodged for imports. The customs declaration must be 
submitted in a specific format, the Single Administrative Document (SAD)2, which may be lodged, 
in writing or el ectronically, with the competent customs authority. For the release of goods, the 
importer is required to provide, along with the declaration, the following documents: a purchase 
invoice (proving the purchase of the goods abroad); a transport document (int ernational road 
transport, or air or railway bill of lading); a cargo manifest (accompanying the transport documents, 
and containing a detailed description of the goods and their packaging); and a certificate of origin, 
if a preferential tariff treatment a pplies. Furthermore, for imports of livestock, goods of animal origin 
and products thereof, as well as seeds, plants and related products, the goods must be accompanied 
by veterinary or phytosanitary certificates issued by the relevant authorities of the c ountry of origin. 
Customs declarations must be submitted through the Automated System for Customs Data  
(ASYCUDA), a computerized customs declaration system  designed by UNCTAD.  
North Macedonia took several trade facilitation initiatives to implement interna tional 
commitments, such as those under the Trade Facilitation Agreement (TFA) and the World Customs 
Organization Revised Kyoto Convention on the Simplification and Harmonization of Customs 
Procedures. To date, North Macedonia has implemented 99.2% of its commitments under the TFA, 
which it accepted in October 2015, and will have implemented another 0.8% by December 2019 
without capacity -building support.3 In January 2018, North Macedonia ratified the CEFTA Additional 
Protocol 5 on Trade Facilitation.4 
In July 2015, North Macedonia became a party to the Convention on a Common Transit 
Procedure and the Convention on the Simplification of the Formalities in Trade in Goods between EU 
member States and EFTA countries. These Conventions, which were concluded in 1 987 and entered 
into force in 1988, provide for easier and faster movement of goods, as transit procedures require 
only a single transit declaration to be submitted in electronic form. North Macedonia has been 
applying the New Computerized Transit System ( NCTS) since March  2014. This aims to facilitate 
                                                
1 The Customs Code was amended most recently in 2018. Other acts relating to customs procedures 
include: the Customs Code Implementing Provisions (2018); the Law on Administrative Fees (2016); the 
Rulebook on the Type and Amount of Fees Payable for Ser vices Rendered by Customs (2015); the Rulebook on 
the Manner of Completing the Customs Declaration and List of Codes used for Completing the Customs 
Declaration (2018); the Law on Customs Tariff (2015); the Law on Excise Duties (2018); the Law on Customs 
Measures for the Protection of Intellectual Property Rights (2016); the Law on Representation Activities in 
Customs Procedures (2016); and the Implementing Regulation of Reliefs of Customs Duty (2014). The years in 
parentheses indicate the year of the most recent amendments.  
2 The contents of the form are laid down by the Rulebook on the Manner of Completing the Customs 
Declaration and List of Codes used for Completing the Customs Declaration, as amended in 2018.  
3 TFA Database. See also WTO documents WT/PCT F/N/MKD/1, 13 February 2015, and G/TFA/N/MKD/2, 
30 January 2018. Communications from North Macedonia pursuant to various notification requirements of the 
TFA can be found in WTO documents G/TFA/N/MKD/1, 22 September 2017, G/TFA/N/MKD/1/Rev.1, 
16 January  2018 and G/TFA/N/MKD/1/Rev.2, 12 November 2018.  
4 Official Gazette No. 12/2018.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
- 34 - 
 
 transit, through the electronic exchange of messages between economic operators and customs 
offices, and between customs offices.5 
Since 2009, the Customs Code has contained provisions on Authorized Economic Operator 
(AEO) status. AEOs benefit from simplified safety - and security -related customs controls and 
procedures. In 2018, amendments were made to the Customs Code and the Customs Code 
Implementing Provisions to harmonize these AEO provisions with the rele vant provisions of the EU 
Customs Code, the EU Customs Code Implementing Act and the EU Customs Code Delegating Act. 
Pursuant to these amendments, two new categories of AEO were recently introduced: AEO for 
Customs Simplification, and AEO for Security and Safety.  
MAKCIS, an automated system for the management of customs procedures, has been 
operational since 1998. Under this system, all customs declarations are  processed through ASYCUDA 
and are automatically imported into the Customs Headquarters' database ; reference data, for 
example on tariff rates, is updated; and information on payments, customs regimes, including TIR 
transit and warehousing, is disseminated from the Customs Headquarters to all other sites within 
the Customs Administration. The Portal f or Electronic Communication (PCU) is an online system for 
electronic document exchange introduced in September 2010. The system enables external users to 
submit various types of requests to the Customs Administration in electronic form. The e exchange 
intends to improve the efficiency of both the Customs Administration and the business community. 
To utilize the system the user is required to register with the PCU. There are currently 482 active 
PCU users. EXIM is the Single Window System for Import, Export and Transit Certificates and 
Customs Quotas introduced in 2008 , which links 16 institutions with competence in foreign trade 
operations. It enables the electronic submission of applications for licenses for import, export and 
transit by economic operators.  
A prominent recent initiative to align North Macedonia's customs administration with the EU 
acquis  is the development of a new Customs Declarations and Excise Documents Processing System 
(CDEPS), which will replace the current ASYCUDA computerized declara tion system. The aim of the 
CDEPS is to enable communication with companies via web portal and system -to-system 
communication by using web services.6 The CDEPS will establish a paperless environment in the 
customs operation, as well as interoperability wit h the customs systems of the European Union. It 
will also enable integration and interconnection with the NCTS, EXIM and the Integrated Tariff 
Environment (ITE).7 The CDEPS includes the exchange of information with other governmental 
institutions through t he system for interoperability of the Ministry of Information Society and Public 
Administration. Thus, all customs procedures that are implemented on paper will be replaced by 
electronic procedures. The authorities expect that the CDEPS will become fully o perational in June 
2019.  
The Customs Administration implements a selectivity system, where imports are screened 
against pre -determined risk criteria and then processed through the appropriate customs channel. 
The categories are: "red channel", where impor ts are subject to full documentation and physical 
inspection; "yellow channel", for goods that are released with documentary checks and no physical 
inspection; "blue channel", for goods requiring post -clearance control; and "green channel", for 
goods benef iting from immediate release with no control. The authorities indicated, based on data 
for the third quarter of 2018, that imports through the red and yellow channels are cleared in 3 
hours and 48 minutes on average and 2 hours and 17  minutes on average, r espectively. The 
authorities indicated that the average processing time for the customs clearance of goods is 47 
minutes.  
According to recent reports and studies, the efficiency of North Macedonia's customs 
procedures has improved. The World Bank Group Doi ng Business Report for 2019 ranks it 29th out 
of 190 economies surveyed under its  Trading Across Borders Index, whereas in 2013, it  was ranked  
                                                
5 Ministry of Finance and Customs Administration online information. Viewed at: 
http://www.customs.gov.m k/index.php/en/e -carina -2/ncts -mk. 
6 Ministry of Finance and Customs Administration online information. Viewed at: 
http://www.customs.gov.mk/index.php/en/e -carina -2/socdad -mk. 
7 The recent introduction of the ITE is also part of the process of harmonization with relevant EU 
customs rules. The ITE is designed to provide online access to comprehensive information on tariff and non -
tariff measures.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
- 35 - 
 
 76th out of 185.8 The score of an economy on this Index is determined by the time and cost for 
documentary compli ance and border compliance to export and import. In 2018, the time required 
to import a shipment of goods into North Macedonia was three hours for documentary compliance9 
and eight hours for border compliance10, while the cost of importing a shipment of goo ds was USD  50 
for documentary compliance and USD 150 for border compliance.11  
The Customs Administration actively participates in inter -agency cooperation to promote the 
electronic exchange of customs data, aimed at preventing customs fraud, smuggling and crime, 
improving cooperation between customs officers at the operational level, facilitating trade, and 
ensuring security at regional and international levels.12 It also participates in the work of the National 
Coordination Centre for Organised Crime and th e National Border Management Coordination 
Centre.13 
As discussed in Section 3.3.8, during the period under review, North Macedonia adopted new 
legislation regarding the application of customs measures for the protection of intellectual property 
rights.  
3.1.1.2   Customs valuation  
Customs valuation in North Macedonia is regulated by the Customs Code, as amended in 
2018, the  Customs Code Implementing Provisions, as amended in 2018, and Article 7 of the GATT 
1994.  
The Customs Code provides different methods (explained in the By -law on Customs Value) 
for customs value determination. The following hierarchical methods are followed: transaction value; 
transaction value of identical goods; transaction value of similar goods; deductive method; 
computed method; and fall -back method. An exception from the hierarchic method can only be made 
on the demand by the declarant for replacement of the deductive method with the computed 
method.   
For the enforcement of the customs valuation procedure, a declaration of value must be 
submit ted, which includes information on: whether other payments, apart from the amount given in 
the invoice, have been or must be settled; the type of transaction; the requirements of the payment; 
the currency of the transaction; transport and insurance expense s, commissions, or residuals; and 
other details relevant to the determination of the good's value. The declaration is filled out by the 
importer or his representative, provided that the declarant has its office in North Macedonia. The 
declaration of value is submitted along with the SAD, the purchase invoice, the consignment note, 
and other commercial documents.   
A declaration of value is not required for imports valued up to EUR 1,000, for non -commercial 
imports, and in other cases provided for in the Cust oms Tariff Law and in the Customs Code 
Implementing Provisions, as amended in 2018. Moreover, for regular imports of goods of a company 
from the same seller under the same conditions, the Customs Authority can waive the requirement 
                                                
8 World Bank online information. View ed at: 
http://www.doingbusiness.org/content/dam/doingBusiness/country/m/macedonia -fyr/MKD.pdf  and 
http://www.doingbusiness.org/content/dam/doingBusiness/media/Annual -Reports/English/DB13 -full-
report.pdf . 
9 Documentary compliance means: obtaining, preparing and submitting documents during  transport, 
clearance, inspections and port or border handling in origin economy, and obtaining, preparing and submitting 
documents required by destination economy and any transit economies. It covers all documents required by 
law and in practice, includin g electronic submission of information.  
10 Border compliance means: customs clearance and inspection by customs; inspections by other 
agencies (if applied to more than 20% of shipments); and port or border handling at most widely used port or 
border of econ omy. 
11 World Bank online information. Viewed at: 
http://www.doingbusiness.org/content/dam/doingBusiness/country/m/macedonia -fyr/MKD.pdf . 
12 Ministry of Fi nance and Customs Administration online information. Viewed at: 
http://www.customs.gov.mk/index.php/en/about -us-en/megunarodna -i-meguinstituciona lna-sorabotka . 
13 UNECE (2017). Global Trade Facilitation and Paperless Trade Survey 2017 . Viewed at: 
http://www.unece.org/fileadmin/DAM/trade/TF_JointUNRCsAppro ach/FYRMacedonia.pdf . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
- 36 - 
 
 that every customs decla ration be accompanied by a declaration of value, but it can be requested in 
case of any modification of the conditions, and at least once every three years.   
During the customs valuation procedure, customs authorities can ask for further data and 
information to determine the customs value. At the end of the procedure, a report is to be made on 
the determination of the customs value, which is used as the basis f or the calculation of import and 
other duties.  
Also of relevance to customs valuation are the new provisions on transfer pricing in North 
Macedonia's legislation on the taxation of corporate profit, which entered into force in January 2019. 
These provisio ns are designed to reflect the transfer pricing guidelines contained in the OECD/G20 
Inclusive Framework to Prevent Base Erosion and Profit Shifting, which North Macedonia joined in 
August 2018.  
3.1.1.3   Pre-shipment inspection  
North Macedonia has no laws or regula tions relating to pre -shipment inspection and does not 
use pre -shipment inspection services.  
3.1.1.4   Special customs regimes  
Under the Customs Code, as amended in 2018, customs duty relief is granted under different 
customs procedures, such as temporary admissio n, inward processing, outward processing, customs 
warehousing, transit, and processing under customs control (Table 3.1). During the period under 
review, there were no major changes with respect to these procedures.  
Table 3.1 Special customs regimes  
Procedure  Summary  
Temporary 
importation  The Customs Administration may provide partial or full exemption from import duties on foreign 
goods for temporary admission into the customs area. A temporary import permit is issued by the 
Customs Administration upon request. The temporary admission proc edure is generally restricted 
to a maximum of 24 months (with a possible extension); and the goods must be intended for re -
export without being modified. A full security deposit (bank guarantee or cash deposit) for the 
amount of import duties is required w hen placing the goods under the temporary importation 
procedure. In the case of a full and punctual re -exportation of the goods, the security deposit is 
returned. The main categories of goods eligible for full duty relief include pallets, containers, 
perso nal goods for sporting purposes, disaster relief materials, material for publicity purposes, etc 
(Article 154 of the Customs Code.)  
Inward 
processing  Raw materials, semi -finished goods and ancillary materials under the inward processing procedure 
may be subject to partial or full exemption from import duties and VAT when entering the customs 
area. With the authorization issued by the Customs Administration, the imported goods are used 
for further processing within the country, and finished goods are expor ted/re -exported.  In 
principle, the arrangement can be used for all types of goods. There are two methods used for 
calculation of import duties and VAT, namely:  
o – the suspension system: no customs duties or VAT are paid as long as goods are not released in  
the country; and  
o – the drawback system: full customs duties are refunded after the completion of the inward 
processing procedure and the re -exportation of the goods.  
Outward 
processing  Domestic goods are temporarily allowed to be exported from the custo ms area in order to undergo 
processing operations; and the goods obtained from such operations are re -imported and released 
for free circulation with partial or full exemption from import duties. All types of goods are eligible 
for the procedure. The impor t duties on the re -imported products are calculated only on the basis 
of the value resulting from the processing operation undertaken abroad.  In this regard, one of two 
methods is used for the calculation of import duties and VAT: the added value method; a nd the 
duty differential method. The validity period of the permit for export for outward processing 
depends on the case and is determined by the Customs Administration.  
Customs 
warehousing  Goods can be temporarily stored without paying import duties, excise or VAT. The goods are 
stored in warehouses until either the relevant import duties are paid, or the goods are exported or 
placed under another customs procedure. Warehouses may be either public or private.  
A public customs warehouse can be used by a nyone; the storage of goods is carried out in the 
name of the owner of the goods. A private customs warehouse is reserved for storing goods by a 
warehouse keeper, not necessarily the owner of goods. In this case, the declaration for entry 
under the warehou sing procedure must be made in the warehouse keeper's name.  
Authorization for the operation of a customs warehouse is issued by the Customs Administration, 
except in the case where the customs authority operates the customs warehouse. Authorization is 
granted only to legal persons established in the country. The goods may remain in the customs 
warehouse for an unlimited period. Any type of good can be stored but, for certain types of goods, 
such as weapons and explosives, additional licences are required.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
- 37 - 
 
 Procedure  Summary  
Transit  The customs authorities approve the movement of goods from one place to another within the 
customs territory, without such goods being subject to the payment of import duties or other 
charges.  
Processing 
under 
customs 
control  The procedure may al low foreign goods to be subject to processing (i.e. led to alter the state of 
the goods) in the customs territory, without being subject to the payment of import duties or other 
charges. The processed goods are released for free circulation, with the impor t duties applicable on 
the final products. The authorization is issued by the Customs Administration if the applicant fulfils 
the conditions, inter alia , the applicant being established in the country; the import goods being 
recognized in the processed pro ducts; sufficient resources for supervising/monitoring the 
procedure; and no misuse of the regulations on rules of origin (RoOs) and tariff quotas applicable 
to the imported goods.  
Privileged 
operations – 
relief from 
import duty 
payment  Articles 193 -198 o f the Customs Code prescribe a number of goods eligible for relief from import 
duty payments, including:  
o - customs privileges for diplomats: exemption from customs duties, and VAT is granted on the 
importation of goods that are intended for the official u se of embassies, consulates, international 
organizations and missions, as well as for the personal use of members of representations;  
o - goods for personal use during the stay (personal luggage);  
o - special equipment and technical aids for disabled persons;  
o - goods used for registered humanitarian and welfare organizations for the purpose of carrying out  
humanitarian activities;  goods used by public museums or public art galleries ;  
o - educational, scientific and cultural items for non -commercial purposes whic h are not  
manufactured in the country;  
o - equipment intended for scientific, research or innovation activities;  
o - products for use at fairs, trade exhibitions or similar events;  
o - coffins, and funerary urns and ornaments; and  
o - publications of foreign gover nments or international bodies intended for distribution free of 
 charge.  
Source:  Information compiled by the WTO Secretariat, based on Customs Administration online information. 
Viewed at: http://www.customs.gov.mk/index.php/en/ ; Consolidated Version, Customs Law - 
Unofficial Version. Viewed at: 
http://www.customs.gov.mk/images/document s/zakoni/CUSTOMSLAWConsolidatedversionmay2018.
pdf; and CEFTA online information. Viewed at: 
http://transparency.cefta.int/tradeportal/macedonia/en/about/ .  
3.1.2   Rules of origin  
North  Macedonia applies non -preferential and preferential rules of origin. The non -preferential 
origin of goods is determined on the basis of criteria enumerated in Articles 25 and 27 of the Customs 
Code, as amended in 201814, and in the Customs Code Implementin g Provisions, as amended in 
2018. Under the non -preferential rules, origin is assigned to the country where the product was 
wholly obtained or where it underwent its last substantial processing. The Customs Code stipulates 
that a document, issued by a Cham ber of Commerce, must be produced as proof of the origin of 
goods. The customs authority may, in the event of reasonable doubt, require the presentation of 
any additional proof to ensure that the indication of origin complies with the customs rules.  
Under  its FTAs, North Macedonia applies preferential rules of origin to EU member States, 
EFTA countries, CEFTA member countries, Turkey, and Ukraine.15 North Macedonia is a contracting 
party to the Regional Convention on Pan -Euro-Mediterranean (PEM Convention) preferential rules of 
origin, which it signed in June 2011.16 The PEM cumulation system and the PEM Convention allow 
for the application of diagonal cumulation of origin among contracting parties, based on their network 
of FTAs with identical origin protoco ls. These protocols are being replaced by a reference to the PEM 
Convention. Hence, North Macedonia may apply diagonal cumulation of origin according to its FTAs 
with the European Union, the EFTA states, the CEFTA parties, and Turkey.17 
                                                
14 WTO document G/RO/N/45, 9 November 2004.  
15 Ministry of Finance, Customs Administration online information. Viewed at: 
http://www.customs.gov.mk/index.php/en/biznis -zaednica -mk-2/presmetka -na-davacki -en/poteklo -en. 
16 Official Gazette No. 66/2012.  
17 The PEM Convention entered into force on 1 January 2012. Currently, its contracting parties are: the 
European Union; the EFTA States; the Faroe Islands; the participants in the Barcelona Process (Algeria, Egypt, 
Israel, Jordan, Lebanon, Morocco, Palestine , Syria, Tunisia, and Turkey); the participants in the European 
Union's Stabilization and Association Process (Albania, Bosnia and Herzegovina, North Macedonia, Montenegro, 
Serbia, and Kosovo); and Moldova.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
- 38 - 
 
 3.1.3   Tariffs  
Imports of g oods into North Macedonia are subject to customs duties, excise duties, VAT, and 
fees. In 2018, fiscal revenues from the collection of customs duties amounted to MKD 5.6 billion, or 
about 5.0% of total tax revenues. VAT accounted for nearly half of the rev enue, (43.7%, 
MKD 49.3 billion), followed by excise duties (22.1%, MKD 25.1  billion), personal income tax (15.6%, 
MKD 17.6 billion) and profit tax (13.1%, MKD 14.7 billion)  (Chart 3.1) . 
Chart 3.1 Tax revenue d istribution (and percentage of total tax revenues), 2018  
 
Source:  National Bank of the Republic of Macedonia, Quarterly report -statistical appendix IV/2018. Viewed 
at: http://www.nbrm.mk/bilteni -en.nspx . 
The main legislation with respect to tariffs is the Customs Tariff Law.18 Annual amendments 
are made, in conformity with the EU Combined Nomenclature. The aligning amendments include the 
descriptions of the goods, tariff codes, and notes concerning sections  and chapters, and apply as 
from 1 January of the following year.19 The Customs Administration provides, on its website, the 
country's tariff information, including applied MFN and preferential tariffs, VAT rates, and an 
indication of goods subject to excis e duties at the tariff line level.20  
North Macedonia grants at least applied MFN tariff treatment to imports from all WTO 
Members and non -WTO Members. The 2019 tariff is based on the 2017 version of the Harmonized 
Commodity Description and Coding System (H S) and the EU Combined Nomenclature, and comprises 
9,854 tariff lines at the 10 -digit level. Tariffs are mostly assessed on an ad valorem  basis (96.8% of 
all tariff lines) and are applied on the c.i.f. value of imports . However, the country continues to 
maintain some 313 tariff lines, equivalent to 3.2% of the total tariff lines, subject to compound and 
mixed duties (Chart 3.2). Unlike ad valorem  tariffs, the level of protection by means of non -ad 
valorem  duties is not evident; estimating the ad valorem  equivalents (AVEs) of those rates allows 
the actual protection of non -ad valorem  duties to be assessed.21 The AVEs used in this Section were 
calculated by the Secretariat as the ratio of specific duties to import unit values, estimated using 
                                                
18 The Customs Tariff Law was originally adopted i n 2003. Official Gazette 23/03. Amendments were 
since published in Official Gazette Nos. 69/04, 10/08, 17/08, 160/08, 35/10, 11/12, 93/13, 44/15, 81/15 and 
192/15.  
19 Customs Administration online information. Viewed at: 
http://www.customs.gov.mk/index.php/en/biznis -zaednica -mk-2/presmetka -na-davacki -en/carinska -tarifa -mk. 
The Decision on Harmonization and Modification of the Customs Tariff for 2019 was published in Official 
Gazette No. 227/18.  
20 Customs Administration online information. Viewed at: 
http://www.customs.gov.mk/index.php/mk/biznis -zaednica -mk/presmetka -na-davacki -mk/carinska -tarifa -
mk/1466 -vodic-carinenje -stoki-mk. 
21 However, there are limits to the accuracy of estimated AVEs, as they are affected by many factors, 
including the base pe riod chosen for the estimation, variations in import prices due to fluctuations of world 
market prices and/or exchange rates, and the source of imports (i.e. whether a tariff concession or exemption 
is taken into account), resulting in a wide variation in AVEs without any change in customs duties.  
Personal income tax 
MKD 17.6bn. (15.6%)
Profit tax
MKD 14.7bn. (13.1%)VAT
MKD 49.3bn. 
(43.7%)Excise duties
MKD 25.1bn. 
(22.2%)Custom duties
MKD 5.6bn. (5.0%)
Other
MKD 0.5 bn. 
(0.5%)Chart 3.[MKD]  Tax revenue distribution (and percentage of total tax revenues), 2018
National Bank of the Republic of Macedonia, Quarterly report -statistical appendix IV/2018. Viewed 
at:http://www.nbrm.mk/bilteni -en.nspx.Tax revenue
MKD 112.8 bn.
Source: WT/TPR/S/ 390 • The Republic of North Macedonia  
 
- 39 - 
 
 the ratio of impor t values to import quantities in 2017 (at the HS 10 -digit level)22, with the estimated 
AVEs ranging from 5.0% to 71.0%. Non -ad valorem  rates are mainly concentrated on preparations 
of vegetables and fruits (HS 20), meat (HS 02), dairy products (HS  04), prep arations of cereals 
(HS 19), fish (HS 03), and edible vegetables (HS 07).  
Chart 3.2 Structure of MFN tariff rates, 2013 and 2019   
(% of total tariff lines)  
 
a Calculations are based on national tariff line l evel (10 -digit), excluding in -quota rates and including 
ad valorem  equivalents (AVEs). The ad valorem  part is used for compound and mixed rates if there 
is no AVE due to no imports in 2017.  
Source:  WTO Secretariat calculations, based on data provided by the authorities.  
The simple average of the 2019 applied MFN tariff is estimated at 8.5%, which remains almost 
identical to that of 2013 (Table 3.2). The coefficient of variation of 1.3 indicates high dispersion, 
with rates ranging from zero to 75.0%, inclu ding the ad valorem  part of mixed rates.23 The applied 
MFN rates above 50%24 apply to 201 tariff lines, mainly for wine of fresh grapes (HS 2204), and 
vinegar (HS 2009).  
Table 3.2 Structure of MFN tariffs, 2019  
 
MFN applied  Final  
boundc 2013a 2019b 
Bound tariff lines (% of all tariff lines)  n.a. n.a. 100.0  
Simple average rate  8.47 8.45 8.7 
 WTO agricultural products  17.4 17.6 18.2 
 WTO non -agricultural products  5.9 5.8 6.3 
 Agriculture, hunting, forestry and fishing (ISIC 1)  10.7 10.3 12.2 
 Mining and quarrying (ISIC 2)  3.3 3.3 3.9 
 Manufacturing (ISIC 3)  8.4 8.4 8.5 
Duty-free tariff lines (% of all tariff lines)  40.0 40.1 35.5 
Simple average of dutiable lines only  14.1 14.1 13.5 
Tariff quotas (% of all tariff lines)  0.01 0.01 0.01 
Non-ad valorem  tariffs (% of all tariff lines)  3.2 3.2 3.9 
Non-ad valorem  tariffs with no AVEs (% of all tariff lines)  1.0 1.0 1.8 
Domestic tariff "peaks" (% of all tariff lines)d 6.3 6.4 6.0 
                                                
22 State Statistical Office's MakStat Database. Viewed at: 
http://www.stat.gov.mk/PoslednoObjavenoVoMakstat_en.aspx . 
23 The highest rate of 75 % (the ad valorem  part of 15%+0.1 EUR/kg maximum 75% (HS 1001190000)) 
was applied because no AVE was estimated, as there were no imports in 2017.  
24 The ad valorem  part is included for compound and mixed rates if no estimates of AVEs are available.  
0%5%10%15%20%25%30%35%40%45%
Duty
free0-10 >10-20 >20-30 >30-40 >40-50 >502013 2019Chart 3.[MKD]   Structure of MFN tariff rates, 2013 and 2019
(% of total tariff lines)
Source:  WTO Secretariat based on data provided by the authorities.Calculations are based on national tariff line level (10 -digit), excluding in -quota rates and including ad valorem equivalents 
(AVEs). The ad valorem part is used for compound and mixed rates if there is no AVE due to no imports in 2017.a.Duty free
40.1%Ad valorem 
rates 
96.8%
Non-ad valorem
3.2%Ad valorem 
(> zero)
56.7%Tariff distribution by type of duty, 2019 Breakdown of applied MFN tariffs, 2013 and 2019aWT/TPR/S/ 390 • The Republic of North Macedonia  
 
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MFN applied  Final  
boundc 2013a 2019b 
International tariff "peaks" (% of all tariff lines)e 16.3 16.1 15.6 
Overall standard deviation  11.0 11.1 10.6 
Coefficient of variation  1.3 1.3 1.2 
Nuisance applied rates (% of all tariff lines)f 1.5 1.5 1.7 
n.a. Not applicable.  
a The 2013 tariff is based on the HS12 nomenclature, consisting of 9,629 tariff lines; AVEs for 2013 
were estimated based on 2012 import data. Where no import data were available,  and no AVE could 
be estimated, the ad valorem  part was used for compound and mixe d rates.  
b The 2019 tariff is based on the HS17 nomenclature, consisting of 9,854 tariff lines; AVEs for 2019 
were estimated based on 2017 import data. Where no import data were available, and no AVE could 
be estimated, the ad valorem  part was used for com pound and mixed rates.  
c Calculations for final bound rates (based on HS12), consisting of 6,774 tariff lines, were taken from 
the Consolidated Tariff Schedules database. AVEs for the bound rates were estimated based on 2017 
import data. Where no import da ta were available, and no AVE could be estimated, the ad valorem  
part was used for compound and mixed rates.  
d Domestic tariff peaks are defined as those exceeding three times the overall simple average applied 
rate. 
e International tariff peaks are define d as those exceeding 15%.  
f Nuisance rates are those greater than zero, but less than or equal to 2%.  
Note:  Calculations are based on national tariff line (10 -digit) level, excluding in -quota rates and including 
AVEs.  
Source:  WTO Secretariat calculations, based on data provided by the authorities, and the CTS database.  
Tariffs applied to agricultural products remain considerably higher (about three -fold) than on 
non-agricultural goods (WTO definition). The average applied tariff on agricultural products is 
17.6%, while that for non -agricultural products is 5.8% ( Table 3.2  and Table 3.3 ). The 2019 average 
applied tariff on agricultural products is slightly up from 17.4% in 2013; this is mainly due to changes 
in estimated AVEs for some agricultural products, d espite no changes in customs duties. Within 
agriculture, beverages, spirits and tobacco (32.9%), fruit, vegetables, and plants (21.6%), cereals 
and preparations (19.0%), dairy products (18.1%), and coffee, tea, and cocoa products (18.0%) 
are the product gr oups with higher average import duties. Among non -agricultural product groups, 
clothing has the highest tariff average rate (17.5%), followed by petroleum (15.2%), and leather, 
rubber, footwear and travel goods (12.7%).  
Table 3.3 Applied MFN tariff summary, 2019  
 
Number 
of lines  Simple 
average (%)  Tariff 
range  
(%) CVa Share of 
duty-free 
lines  
(%) Share of 
non-ad 
valorem  
tariffs  
(%) 
Total  9,854  8.5 0-75 1.3 40.1 3.2 
HS 01 -24 2,617  15.2 0-75 1.1 35.8 12.0 
HS 25 -97 7,237  6.0 0-25 1.1 41.7 0.0 
By WTO category        
WTO agricultural products  2,208  17.6 0-75 1.0 24.8 13.5 
Animals and products thereof  359 14.5 0-66 0.6 10.0 18.7 
Dairy products  153 18.1 0-66 0.6 0.7 30.7 
Fruit, vegetables, and plants  570 21.6 0-65 0.7 12.5 4.9 
Coffee, tea, and cocoa, and 
cocoa preparations  47 18.0 0-34.6 0.5 10.6 23.4 
Cereals and preparations  237 19.0 0-75 0.8 11.4 14.3 
Oil seeds, fats, oils, and their 
products  175 2.3 0-33.6 2.4 74.9 4.6 
Sugars and confectionary  44 10.4 0-30 0.9 18.2 20.5 
Beverages, spirits and 
tobacco  356 32.9 0-70 0.7 22.2 25.6 
Cotton  6 0.0 0.0 0.0 100.0  0.0 
Other agricultural products, 
n.e.s.  261 2.7 0-45 2.4 70.5 0.8 
WTO non -agricultural 
products  7,646  5.8 0-62 1.2 44.5 0.2 
Fish and fishery products  528 1.8 0-62 4.0 92.0 3.0 
Minerals and metals  1,465  5.1 0-23 1.2 49.4 0.0 WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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Number 
of lines  Simple 
average (%)  Tariff 
range  
(%) CVa Share of 
duty-free 
lines  
(%) Share of 
non-ad 
valorem  
tariffs  
(%) 
Chemicals and photographic 
supplies  1,380  2.9 0-25 1.1 44.5 0.0 
Wood, pulp, paper and 
furniture  473 2.7 0-18 1.9 75.9 0.0 
Textiles  838 8.1 0-25 0.7 25.4 0.0 
Clothing  341 17.5 17.5 0.0 0.0 0.0 
Leather, rubber, footwear 
and travel goods  270 12.7 0-25 0.7 14.1 0.0 
Non-electric machinery  915 4.6 0-16 1.3 53.8 0.0 
Electric machinery  480 7.6 0-25 0.9 33.1 0.0 
Transport equipment  286 6.4 0-20 0.9 23.8 0.0 
Non-agricultural products, 
n.e.s.  621 6.4 0-25 1.0 40.1 0.0 
Petroleum  49 15.2 0-20 0.4 6.1 0.0 
By ISIC sectorb       
ISIC 1 - Agriculture, hunting 
and fishing  702 10.3 0-75 1.5 54.0 7.4 
ISIC 2 - Mining and 
quarrying  116 3.3 0-15 1.6 58.6 0.0 
ISIC 3 - Manufacturing  9,035  8.4 0-70 1.3 38.8 2.9 
By stage of processing        
First stage of processing  1,277  7.8 0-75 1.7 58.7 4.4 
Semi-processed products  2,870  3.6 0-55 1.5 54.4 0.1 
Fully processed products  5,707  11.1 0-70 1.1 28.8 4.5 
a Coefficient of variation.  
b International Standard Industrial Classification (Rev.2). Electricity, gas and water are excluded 
(1 tariff line).  
Note:  Calculations for averages were based on the national tariff line (10 -digit) level, excluding in -quota 
rates. Tariff schedu le was based on HS17. AVEs were estimated based on 2017 import data at the 
10-digit tariff from the State Statistical Office. In case of unavailability, the ad valorem part was 
used for compound and mixed rates.  
Source:  WTO Secretariat calculations, based on data provided by the authorities.  
The evidence on whether the applied MFN tariff structure displays a pattern of tariff escalation 
is somewhat mixed, depending upon how broadly the product categories are defined. The average 
tariff in 2019 is estimated at 7.8% on raw materials, 3.6% on semi -processed products, and 11.1% 
on fully processed products ( Table 3.2 and Table 3.3 ). However, at a more disaggregated level, 
positive escalation (indicating higher rates of effective protection for more processed prod ucts) 
seems to exist on some products: tariffs for fresh fruits and vegetables, semi -processed fruits and 
vegetables, and preparations (i.e. canning) of fruits and vegetables are 8.6%, 22.9%, and 28.6%, 
respectively; cotton raw materials, cotton thread/yar n and woven fabrics, and clothing of cotton are 
zero, 7.6%, and 17.5%, respectively; and leather (raw skins), semi -processed leather (e.g. tanned 
or crust), and leather products are zero, 7.4%, and 16.2%, respectively.  The high tariff protection 
for certai n finished products may act as a disincentive to increase international competitiveness of 
the finished products.  
3.1.3.1   Tariff rate quotas  
North Macedonia maintains tariff rate quotas for imports of agricultural products under the 
MFN tariff quota and under certain provisions of its FTAs with the European Union, Turkey, Ukraine, 
and EFTA (Switzerland and Norway). Allocation of tariff rate quotas is on a first come, first served 
basis, at zero or lower import duties within the agreed annual quantities. All applications are 
submitted via the EXIM system to the Customs Administration. The unused quantities of quotas at 
the end of each quarter are transferred to the next quarter. The Ministry of Economy publishes, in WT/TPR/S/ 390 • The Republic of North Macedonia  
 
- 42 - 
 
 the Official Gazette, the list of goods which are subject to tariff rate quotas, once a year for the MFN 
tariff quota, and twice a year for tariff quotas under preferential agreements.25  
While North Macedonia applies one t ariff rate quota on wheat (HS  1001990000) on an MFN 
basis for all WTO Members26, the majority of the tariff rate quotas are country -specific, pursuant to 
FTAs. For example, about 37 were open to the European Union in 2017. Tariff rate quotas apply 
mainly to  meat products, dairy products (e.g. cheese, milk, and yoghurt), preparations of fruits and 
vegetables, and confectionary products (Table 3.4).  
Table 3.4 Products subject to tariff rate quotas pursuant to the FTAs in 201727 
FTAs  Number 
of TQs  Main products  
European Union  37 Milk and cream, yog hurt, cheese, vegetables (e.g. cucumbers, onions, 
potatoes), sausages, truffles, meat of swine, carp (live), margarine, 
sugar confectionary, pasta, bakery products (e.g. b read, pastry), 
chocolate and other food preparations, yeasts, sauces, waters, cigarettes, 
sparking wine, wine  
Turkey  8 Meat, hazelnuts, citrus fruits, dried grapes, olive oil, olives  
Ukraine  10 Meat of bovine animals, meat of swine, milk and cream, barley, sugar 
confectionery, chocolate and other food preparations, sweet biscuits, 
waffles and wafers, jams, waters  
Switzerland (EFTA)  2 Milk and cream, cheese  
Norway (EFTA)  1 Cheese and curd  
Source:  Information compiled by WTO Secretariat, based on information provided by the authorities.  
3.1.3.2   WTO bindings  
North Macedonia's latest certified schedule of tariff concessions was in HS12.28 The country 
is not covered by the HS17 waiver.29  
North Macedonia has bound 100% of its tariff lines at rates ranging from zero to 75%.30 As 
in the case of applied tariffs, ad valorem  rates apply to most bound tariff lines, except for agricultural 
products such as meats, dairy, cereal and preparations, fruits and vegetables, and fish products with 
compound and mixed bound tarif fs. The simple average bound rate on agricultural products (WTO 
definition) is 18.2%, whereas the rate on non -agricultural products is 6.3% ( Table 3.2 ). Moreover, 
all other duties and charges (ODCs) are bound at zero.  
A full comparison between MFN applied  and bound rates was not possible; some 12% of tariff 
lines could not be compared, mainly due to changes in the HS nomenclature and in the structure of 
the tariff schedule. For those lines for which a comparison was possible, applied MFN rates exceed 
the corresponding bound rates for 13 tariff lines ( Table 3.5 ).  
Table 3.5 Tariff lines where applied MFN rates may exceed bound rates, 2019  
Tariff code  Product description  Tariff 2019  Bound 
tariff  
1001919000  Seeds; other  15+0.1 EUR/kg max.75  
(AVE= 50.52%)  0 
2852100000  Inorganic or organic compounds of mercury, chemically 
defined  5 2.7 
3824740000  Containing hydrochlorofluorocarbons (HCFCs), whether 
or not  containing perfluorocarbons (PFCs) or 
hydrofluorocarbons (HFCs), but not containing 
chlorofluorocarbons (CFCs)  6 0 
                                                
25 Custom s Administration online information. Viewed at: 
http://www.customs.gov.mk/index.php/en/biznis -zaednica -mk-2/presmetka -na-davacki -en/tarifni -kvoti-mk. 
26 WTO document G/AG/N/MKD/22, 18 January 2018.  
27 The same tariff rate quotas applied in 2018 and 2019.  
28 WTO document WT/Let/1401, 27 September 2018.  
29 WTO document WT/L/1051, 13 December 2018.  
30 The highest rate of 75% (the ad valorem  part of 1 5%+0.1 EUR/kg maximum 75% (HS 1001190000)) 
was applied because no AVE was estimated, as there were no imports in 2017.  
 WT/TPR/S/ 390 • The Republic of North Macedonia  
 
- 43 - 
 
 Tariff code  Product description  Tariff 2019  Bound 
tariff  
3824781000  Containing PFCs) or HFCs, but not containing CFCs or 
HCFCs  6 0 
3824782000  6 0 
3824783000  6 0 
3824784000  6 0 
3824788000  6 0 
3824789000  6 0 
8486900010  - Parts and accessories  3 0 
8512301000  Sound signaling equipment: burglar alarms of a kind 
used for motor vehicles  15 8 
8517700015  Telephone sets, including telephones for cellular 
networks or for other wireless networks; parts 5 0 
8517700019  5 0 
Source:  WTO Secretariat estimates, based on data provided by the authorities, the WTO IDB, and the CTS 
database.  
3.1.3.3   Preferential tariffs  
North Macedonia applies preferential tariffs to imports from certain countries, pursuant to its 
reciprocal agreements with the European Union, the CEFTA, the EFTA, Turkey, and Ukraine 
(Section  2.3.2). An invoice declaration (origin declaration) or EUR 1 (EUR -MED) movement 
certification is required in order to benefit from preferential duty rates.   
In addition to duty -free coverage on an MFN basis (about 40% of total tariff lines), the share 
of duty -free lines under the FTAs vary from 82.9% for Ukraine to 90.5% for the European Union 
(Chart 3.3 and Table 3.6). North Macedonia grants duty -free acces s to all imports from its partners 
under the CEFTA. The main exceptions from preferences (except for CEFTA) are in the categories of 
meat products (HS  02), dairy produce (HS 04), and preparations of vegetable and fruit products 
(HS 20). Preferences given t o FTA partners are limited, especially for agricultural products: the 
simple average tariffs under FTAs are just below or almost identical to the MFN tariff ( Table 3.6 ), 
mainly due to exceptions from preferences for certain agricultural product groups, as noted earlier. 
On the other hand, tariffs for non -agricultural products are nearly all zero.  
Chart 3.3 Breakdown of applied MFN and preferential tariffs  
(Number of tariff lines)  
 
Source:  WTO Secretariat calcu lations, based on data provided by the authorities.  
01,0002,0003,0004,0005,0006,0007,0008,0009,00010,00011,000MFNEFTAEUTurkeyUkraineChart 3.[MKD] Breakdown of applied MFN and preferential tariffs, 2019
(Number of tariff liens)
MFN duty -free
Dutiable lines (no preferential rate)Duty-free
Reduced ratePreferential tariffs 
WTO  Secretariat calculations, based on data provided by the authorities. Source:WT/TPR/S/ 390 • The Republic of North Macedonia  
 
- 44 - 
 
 Table 3.6 Tariffs under preferential agreements, 2019  
 
Simple average tariffs 
(%) Duty -free rates (including MFN 
duty-free) as a percentage of 
total tariff lines in each 
category (%)  Tariff lines not 
covered by 
preferential tariffs  
(% of total tariff 
lines)  All Agr. Non-Agr. All Agr. Non-Agr. 
Applied MFN  8.5 17.6 5.8 40.1 24.8 44.5 59.9 
EFTA 3.7 16.7 0.0 83.8 27.9 100.0  15.3 
European Union  2.9 12.8 0.1 90.5 59.3 99.5 7.7 
Turkey  4.0 17.6 0.1 83.0 25.8 99.5 17.0 
Ukraine  4.0 17.6 0.1 82.9 25.6 99.4 17.1 
Note:  Duty-free treatment is granted to all imports from CEFTA countries.  
 0.0 refers to >0 and <0.05; 100.0 refers to >99.55 and <100.  
Source:  WTO Secretariat calculations, based on data provided by the authorities.  
3.1.4   Other charges affecting imports  
The import of goods into North Macedonia is subject to the payment of VAT (Section 3.3.1 ). 
A limited number of goods imported into the country are also sub ject to excise duties. Petroleum 
products, alcohol and alcoholic beverages, tobacco products, and passenger motor vehicles are 
subject to excise duty at a flat or percentage rate. The excise period is one calendar month, and the 
excise duty is payable with in 15 days of the end of the calendar month. The excise duty for alcoholic 
beverages and tobacco goods is levied by selling excise stamps.  
The amount of excise duty for petroleum products depends on the type of product and is 
payable per litre or kilo. Alc ohol and alcoholic beverages are taxable per litre or percentage of 
alcohol. Some categories of alcoholic beverages (e.g. wine) are not subject to excise duty. The 
maximum excise duty payable is MKD 340 per litre on pure alcohol. The excise duty for tobacc o 
products is calculated both per unit/kilogram and as a percentage of the retail price. Since July 2014, 
the rate of the specific and minimum excise duty on cigars/smoking tobacco has increased gradually 
every year. The excise duty for passenger motor veh icles is calculated as a percentage of the market 
value or the custom value of the vehicle. It ranges from 0% for vehicles valued up to EUR 3,000 to 
18% for vehicles valued above EUR 30,000. 31  
At the time of writing, a new law on the timing of payment of excise duties, designed to 
achieve full harmonization with EU rules on excise duties, and a new law on excise duties on motor 
vehicles, were under consideration by the legislature and were expected to enter into force in 
July 2019.  
Several other fees and c harges are levied by customs for import -related services rendered. 
These include customs control of goods at particular locations or during non -working hours, certain 
laboratory testing and sampling, notification of outstanding customs debt and fees relate d to the 
electronic access to information of, and submission of documents to, the Customs Administration.  
3.1.5   Import prohibitions, restrictions, and licensing  
The importation of certain goods (e.g. certain animals and birds, plants, fertilizers, narcotics, 
arms, and ozone -depleting substances) into North Macedonia is prohibited for reasons related mainly 
to the protection of national security, public morals, the environment, health, endangered species, 
and national treasures of artistic, historical or archaeol ogical value.   
Certain categories of products are subject to import licensing. The Decision on Classification 
of Goods into Forms of Export and Import32 contains nine annexes, listing products the import 
(and/or export) of which requires a (non -automatic) licence from different government departments. 
                                                
31 Viewed at: http://taxsummaries.pwc.com/ID/Macedonia -Corporate -Other -taxes . 
32 Official Gazette  No. 42/2013. The Decision is based on Article 34, paragraph 2 of the Law on Trade. 
The list of products subject to import licensing pursuant to this Decision is available on the webpage of the 
Ministry of Economy. Vie wed at: http://www.economy.gov.mk/ . See also WTO document WT/TPR/S/290, 
23 October 2013, Table 3.7.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
- 45 - 
 
 The product coverage of the import licensing regime provided for in this Decision did not change in 
recent years.33 The import licensing provided for in this Decision applies to goods from all countries, 
is not  intended to restrict the quantity or value of imports and is applied pursuant to the general 
exceptions in Articles XX and XXI of the GATT 1994.34  
Specifically, import licensing administered by the Ministry of Health, the Ministry of 
Agriculture, the Ministry of Environment and Physical Planning, and the Radiation Safety Directorate 
is aimed at protecting human, animal or plant life or health and/or conserving exhaustible natural 
resources. The Ministry of Economy also applies import licensing to regul ate the import of gold or 
silver. The Ministry of Culture applies it to protect public morals or to protect national treasures of 
artistic, historic or archaeological value. The Ministry of the Interior and the Ministry of Defence 
apply import licensing to  protect essential security interests, or pursuant to obligations under the 
UN Charter.35 The product coverage of the Decision is not subject to administrative discretion, and 
the system cannot be abolished without legislative approval.36 The authorities con firmed that the 
licensing procedures apply as long as the need exists for North Macedonia to implement measures.  
Import licences must be issued within a maximum of 15 days from the submission of the 
application. There are no limitations as to the period of  the year during which applications for licences 
may be made. When applying for an import licence, an importer must approach only one 
administrative organ in connection with the application. If the application meets the criteria, a licence 
is granted. Fail ure to meet the ordinary criteria is the only circumstance in which a licence application 
may be refused. In the event of refusal to issue a licence, the applicant has the right to appeal, in 
accordance with the Law on General Administrative Procedure. A l icence is valid for three or six 
months from the date of issue. There is no penalty for the non -utilization of a licence or a portion 
thereof. Licences are not transferable between importers. No other conditions are attached to the 
issuance of a licence. T here is a licensing administrative charge of MKD 600 for administrative 
expenses pursuant to the Law on Administrative Fees; no deposit or advance payment is required 
for licensing.37 Applications for import licences can be submitted electronically through the EXIM 
Single Window System.  
The authorities maintain that the current import licensing regime is in full compliance with 
WTO rules.  
3.1.6   Anti-dumping, countervailing, and safeguard m easures  
The legal framework governing the application of trade contingency measures by North 
Macedonia has remained unchanged since the previous Review. Chapter V of the Law on Trade38 
regulates the application of anti -dumping, countervailing and safeguard measures. Additionally, the 
procedure and method of determining such measures are stipulated in Decisions published in Official 
Gazette  No. 109/07 and Official Gazette  No. 28/05.  
The Commission on Protective Measures, established in accordance with Article  35 of the Law 
on Trade, is the competent authority to take decisions on the initiation of an investigation into 
dumping, subsidized imports, or imports in such increased quantities that could cause, or threaten 
to cause, injury to the domestic market. The  Commission is entitled to determine the amount of 
injury, while the Government may impose the respective duty or measure to mitigate the injury.  
Since the previous Review, North Macedonia has neither imposed any anti -dumping, 
countervailing duty or safeg uard measures  nor initiated any anti -dumping, countervailing duty or 
safeguard investigations.  
                                                
33 WTO documents G/LIC/N/3/MKD/6, 14 December 2017; G/LIC/N/2/MKD/2, 14 December 2017; and 
G/LIC/N/3/MKD/7, 6 March 2018.  
34 WTO document G/LIC/N/3/MKD/6, 14 December 2017.  
35 WTO document G/LIC/N/2/MKD/2, 14 December 2017.  
36 WTO document G/LIC/N/3/MKD/6, 14 D ecember 2017.  
37 WTO document G/LIC/N/3/MKD/6, 14 December 2017.  
38 Official Gazette  No. 16/04; and amendments in Official Gazette Nos. 128/06, 63/07, 88/08, 159/08, 
20/09, 99/09, 105/09, 115/10, 158/10, 36/11, 53/11, 148/13, 164/13, 97/15, 129/15, and 53/16 . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
- 46 - 
 
 3.2  Measures Directly Affecting Exports  
3.2.1   Customs procedures and requirements  
Exporters are subject to the same registration regime as importers. At the end of 2018, t here 
were 3,803 registered commercial exporters.39  
In addition, the export of a given merchandise requires the submission to the customs 
authorities, by the exporter or his/her representative, of the following documents: a customs 
declaration, an invoice o f sales, a transport document, a bill of lading or a cargo manifest, a 
certificate of origin, and v eterinary or phytosanitary certificates  in the case of export of livestock, 
goods of animal origin or products thereof, as well as seeds, plants and related products.  
3.2.2   Taxes, charges, and levies  
North Macedonia does not apply export duties.  
3.2.3   Export prohibitions, restrictions, and licensing  
The export of certain products from North Macedonia is prohibited or is subject to licensing 
for reasons of the protection  of human, animal or plant life or health, the protection of public morals, 
or the protection of the environment.  Products subject to prohibition or export licensing are identified 
in the annexes to the Decision on Classification of Goods into Forms of Exp ort and Import.40 The 
authorities indicated that there were no major changes to the list of products subject to export 
prohibition or licensing since the previous Review.41  
In March 2018, North Macedonia amended its export control law, by adopting a new lis t of 
dual-use goods and technologies (OG 131/2018) that transposes Annex 1 of the relevant EU 
regulation.42  
3.2.4   Export support and promotion  
The main instrument used by the Government to promote and support exports is the 
Technological Industrial Developments Zones (TIDZ s). These  attract essentially multinational 
companies , processing parts within global value chains (e.g. automotive and machinery) ; they 
import most of the inputs to be processed and then re -export almost all  of their production. Other 
export pr omotion instruments, notably those destined for local companies and SMEs, are, by 
comparison, of a lesser magnitude. However , in the framework of the 2019 -27 industrial strategy 
and of the May 2018 Law on Financial Support for Investment , the Government is  planning to 
overhaul and strengthen the export promotion institutional framework , and to create new subsidy 
schemes so as to better include local companies and SMEs , as detailed below.  
The legal regime regulating the TIDZ s was established in 2008  and did not undergo any 
significant changes during the period under review . TIDZs offer the following advantages  to foreign 
investors:  
• a ten-year corporate tax  holiday ; 
                                                
39 The FTAs signed by North Macedonia contain a procedure whereby exporters can obtain the status of 
"approved exporter", which makes it easier to comply with the applicable rules of origin.  
40 Official Gazette  No. 42/2013. The list of products the export of which is prohibited or requires a 
licence by virtue of this Decision is available on the webpage of the Ministry of Economy. Viewed at: 
http://www.economy.gov.mk/ . 
41 WTO document WT/TPR/S/290, 23 October 2013, Table 3.8.  
42 Commission Delegated Regulation (EU) 2017/2268 of 26 September 2017 amending Council 
Regulation (EC) No. 428/2009 setting up a Community regime for the control of exports, transfer, brokering 
and transit of dual -use items. Viewed at: https://eur -lex.europa.eu/legal -
content/EN/TXT/PDF/?uri=CELEX:32017R2268&from=EN . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
- 47 - 
 
 • an exemption from customs duties43 and VAT on imported raw materials, equipment and 
constructio n materials ; 
• 0% personal income tax for ten years ; 
• 0% property tax ; 
• 0% excise tax ; 
• free connection to utilities ; 
• a subsidy of up to EUR  500,000 for construction costs;  
• a green -light custom s channel at the border for expeditious exports to EU countries ; 
• land leases for up to 99 years ; and  
• grants for training and job creation.  
The Commission for the Protection of Competition oversees the granting of these advantages. 
Its approval, which certifies conformity with state aid rules (based on the EU acquis ), is required for 
each individual deal with a company.  
These Zones are export -oriented.44 Companies working therein are not prohibited from selling 
their production locally but, in such cases, normal duties, taxes and charges apply  fully. 
There are four fully -operational TIDZs. Three (Skopje 1, Skokje2 and Stip) are managed by 
a public body, the Directorate for Free Trade Zones, while the Tetovo Zone is managed under a 
public -private partnership scheme with a Norwegian company. Eleven more zones are at various 
stages of development. Table 3.7 below describes the size, number of investors, sectors and 
cumulative investment in the already -operational zones.  
Table 3.7 Active TIDZs  
Zone name  Area (ha)  No. of investors  Cumulative investment  
(in EUR million)  Main operating industry  
Skopje 1  140 12 208 Automotive  
Skopje 2  97 1 25 Automotive  
Stip 206 3 12 .. 
Tetovo  95 1 .. .. 
Prilep  67 2 20 Automotive/plastics  
Struga  30 2 15 .. 
Strumica  25 1 .. .. 
Kichevo  30 1 15 Electronic/cables  
Gevgelija  50 .. 15 Automotive  
.. Not available.  
Source:  Data compiled by the OECD and gathered from national zone administrators.  
The TIDZs presently host 32 foreign companies, employ 12,500 people, and account for 36% 
of the value of exports (notably chemicals, machinery and transport equipment). According to a 
2017 OECD study45, IDZs accounted for about 45% of total manufacturing FDI in North Macedonia, 
in the previous five years. The new industrial strategy, adopted in 2018 (see Section 4.3),  aims to 
                                                
43 However, the impact of this exemption should not be overrated. In practice, most of the imports 
concerned come from the European Union or countries with whom North Macedonia has an FTA, and are 
therefore not subject, in most instances, to customs duties u nder the normal regime.  
44 More generally, an OECD study finds that most special economic zones in the Western Balkans should 
be classified as export processing zones. OECD, Tracking Special Economic Zones in the Western Balkans: 
Objectives, features and Ke y Challenges , 2017, p. 32. Viewed at: http://www.oecd.org/south -east-
europe/SEZ_WB_2017.pdf . 
45 OECD, Tracking Special Economic Zones in the Western Balkans: Objectives, Features and Key 
Challenges , 2017. Viewed at: http://www.oecd.org/south -east-europe/SEZ_WB_2017.pdf . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 increase the spill -overs of these Zones to domestic companies, and in particular MSMEs, as these 
spill-overs have remained, up to now, relatively marginal.  
During the period under review , the network of 30 "economic promoters", scattered 
throughout  the embassies , was centralized in InvestMacedonia , and the focus was placed  on the 
organization of business -to-business (B 2B) meetings , notably in the textile, ICT, and machinery 
sectors , and on support for participation in industrial fairs.  
Stimulating manufacturing exports is one of the five objectives set by the new industrial 
strategy. To achieve this objective, the action plan foresees a strengthening of the institutional 
framework of export promotion. The Ministry of Economy is to prepar e an export strategy in close 
cooperation with InvestMacedonia (for the promotion aspects) and the Ministry of Foreign Affairs 
(for the commercial diplomacy aspects) , specifying the sub -sectors, products and countries to target.  
InvestMacedonia is expecte d to be designated as the single point of contact for exports, and 
will review and reform its Export Promotion Department in order to allocate more resources and 
capacities to support export promotion activities. It is expected that EUR  100,000 will be all ocated 
to these reforms for 2019 -20.  
In addition, capacity -building efforts are also expected to be undertaken in 2019 -20. The SME 
portal is to be improved , to include more information on export opportunities, and training 
programmes on standards are to be made available to export -oriented companies and SMEs. EUR 
143,000, originating from EU support funds, is to be spent between 2018 and 2020  to support the 
export accelerator for SMRE . This is  a program me managed by the Organisation of Employers and 
the In stitute for Dynamic Development Sfera -Nova. Its aim is to stimulate exports from the food 
processing industry , by providing assistance in relation to export procedures, documentation and 
other related export activities (analyses, new markets, contacts with  distribution networks, etc.).  
The new Law on Financial Support for Investment s, promulgated in May 2018 , institutes a 
system of financial support for projects , aimed at winning new markets and increasing sales abroad 
(for a description of the conditions s et and maximum amount granted , see Table A3 .1. Activities 
supported include participation in fairs abroad; business missions; B2B in foreign markets; 
contribution to costs for certifying products according to foreign market requirements; and 
contribution t o costs for building capacit y regarding marketing in foreign markets (preparation of 
promotional material, catalogues, brochures, and website design).  The granting procedure is 
managed by the Agency for Foreign Investments and Export Promotion.  
A Manufacturing Export Readiness Support Programme is expected to  be created in 2020. It 
is expected to be funded by a EUR 5 million grant ; the donor remains to be found. It is to select 300 
manufacturing SMEs with export potential and provide them with support in terms of investment 
readiness (including web tools), technical assistance and capacity building; and financing for export 
readiness (e.g. standards, health and safety, marketing, business planning, technology, branding, 
labelling, packaging, produc t testing, certification, contracting, customs, logistics, marketing, 
information and analysis, etc.).  
3.2.5   Export finance, insurance, and guarantees  
A 100% state -owned development bank , the Macedonian Bank for Development Promotion  
(MPDB),  provides short -term export credit insurance to cover commercial risks (bankruptcy, or 
protracted default) and political risks (war, licen ce cancelling,  or breach of contract ). Table 3.8 
indicates the amount of exports insured and the premiums paid by exporters.  
Table 3.8 Amount of exports insured, and premiums perceived by the export credit 
system, 2012 -18 
(EUR million)  
Year Insured exports  Premium s 
2012 20.63 0.18 
2013 28.49  0.21 
2014 38.43  0.28 
2015 41.96 0.28 
2016 49.58  0.27 WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 Year Insured exports  Premium s 
2017 65.05 0.36 
2018 58.14  0.26 
Source:  Information provided by the authorities.  
In addition , the MBDP has four credit line arrangements with the European Investment Bank , 
with subsidized interest rate s; in 2018 , the amount of subsidization for all four arrangements was 
EUR 1.49 million . The MBDP also finances export projects at market conditions.  
3.3  Measures Affecting Production and Trade  
3.3.1   Taxation  
With the aim of attracting investment and accelerating business devel opment, North 
Macedonia maintains a competitive taxation system, with some of the lowest rates worldwide.46 
Taxation is regulated mainly by the Law on Profit Tax , the Law on Personal Income Tax Law, the 
Law on Value Added Tax, the Law on Property Taxes, the Law on Technological Industrial 
Development Zones, and several double taxation treaties.  
Companies are subject to corporate income tax on realized profits, at a  rate of 10%. Resident 
companies (established under local law) are taxed on their worldwide income but can claim credit 
for taxes paid abroad. Non -resident companies are taxed on the profit realized through their 
permanent establishment in North Macedonia.  Capital gains and losses are treated as ordinary 
income, and are included in the taxable base of the company. C ompanies can benefit from a 
simplified tax regime if their overall annual income from all sources is between MKD 3 million and 
MKD 6 million. Th ese companies pay corporate income tax of 1% on their overall income from all 
sources as stated in their income statement and financial statements for the respective calendar 
year. Depreciation is recognized for tax purposes, and includes both tangible and  intangible assets. 
Buildings are depreciated at a rate of 2.5% to 10%, furniture at 20%, vehicles at 25%, computers 
at 25%, and machinery and production equipment at 5% to 10%.  
A withholding tax of 10% applies to certain types of income paid by a local co mpany to a 
foreign legal entity. Lower rates may apply if specific income is covered under a double taxation 
treaty. The types of income paid to foreign residents that are subject to withholding tax are: 
dividends; interests; royalties; entertainment or sp orting activities; management, consulting of 
financial services; R&D services; telecommunication services; insurance and re -insurance 
premiums; and rental of real estate located in North Macedonia.  
A value added tax (VAT) is charged at a standard rate of 1 8% on the supply and import of 
goods and services. A lower rate of 5% applies to supplies of certain basic goods and services, such 
as food for human consumption; food for livestock; drinking water from public supply systems; 
computers and software; agricu ltural material and equipment; wood pellets, pellet stoves, and pellet 
boilers; baby products; school supplies (e.g. school backpacks, notebooks, and pencils); 
pharmaceutics and medical equipment; and publications, such as books, pamphlets, newspapers, 
and other printed material, except for publications mainly used for advertising purposes. (Table 3.9). 
All taxpayers whose total annual turnover exceeds MKD 1 million, or whose total supplies are 
projected to exceed this amount, are liable to register for VAT  purposes. The Law on VAT was last 
amended in October 2018, and is administered by the Ministry of Finance.  
Until recently, personal income tax was set at a flat rate of 10%. However, since 
1 January  2019, the portion of income that exceeds MKD 90,000 per  month is taxed at a rate of 
18%, and income up to MKD 90,000 continues to be taxed at a rate of 10%.47 Income from capital, 
property, industrial property rights, insurance, capital gains, games of chance, and other income is 
taxed at 15% (raised from 10%).  Residents are taxed on their worldwide income, while non -
residents are subject to tax only on income generated in North Macedonia. Employers are required 
to make social security contributions on behalf of their employees, for pensions, health insurance 
and unemployment. Ownership of real property is subject to tax, at rates ranging from 0.10% to 
                                                
46 According to the World Economic Forum's Global Competitiveness Report 2015 -2016, North 
Macedonia has  the lowest total tax rate in the world, at 7.4%.  
47 Amendment to the Law on Personal Income Tax, Official Gazette No. 241/18 of December 2018.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 0.20%. The transfer of real property is taxed at rates ranging from 2% to 4%. These taxes are 
levied by the municipalities.  
Table 3.9 Taxation, as at 1 January 2019  
Corporate taxation  
Profit tax  10% A profit tax of 10% is applied on realized profits. 
Corporate income tax is also levied on non -deductible 
expenses  
Withholding tax  10% Domestic withholding tax of 10% on certain payments to 
foreign residents. Double taxation treaty relief is possible  
Special features   Transfer pricing rules impose severe penalties on both 
corporations and responsible persons for the 
underestimation or false reporting of the taxable base  
Value added tax  
General rate  18% On most goods and services  
Reduced rate  5% Only on a few goods, such as food, drinking water, 
publications, seeds, agricultural machinery, fertilizers, 
wood pellets, computers and software, baby products, 
school supplies,  pharmaceuticals and medical 
equipment, the transport of passengers, accommodation 
services, half -board and full -board services provided by 
hotelkeepers, etc.  
Refund period  30 days   
Individual taxation  
Personal income tax  10% 
18% On income up to MKD 90,000 a month  
On the portion of the income tax base that exceeds MKD 
90,000 a month  
Mandatory social security 
contributions  27.5%  18.4% - pension and disability fund;  
7.4% - health insurance;  
1.2% - unemployment contribution; and  
0.5% - additional health  insurance  
Other taxes  
Property tax  0.10% -0.20%  The tax base is the property's market value  
Transfer tax  2%-4% The tax base is the property's market value  
Source:  WTO Secretariat, based on information provided in KPMG, Investment in Macedonia 2018 . 
3.3.2   Incentives  
The Government offers numerous support measures to enterprises, including MSMEs, as part 
of its overall economic strategy to promote industrial development, competitiveness and the creation 
of new and better -paid jobs. The measures are set out i n several documents, mainly the Economic 
Growth Plan, the Industrial Strategy, and the Programme for Competitiveness, Innovation and 
Entrepreneurship. The objective underpinning these measures is to encourage investment, 
particularly in manufacturing, and to promote the linkages between local companies and foreign 
direct investment with the aim of strengthening the integration of the national economy into 
international value chains. Most of the measures take the form of financial support. Prior to their 
implementation, the programmes setting out support measures must obtain approval from the 
Commission for the Protection of Competition, in accordance with the Law on State Aid Control, 
which is aligned with relevant EU legislation in this sphere (Section 3.3. 5.2). The incentives provided 
to companies operating in the Technological Industrial Development Zones (TIDZs) are dealt with in 
Section 3.2.4.  
The Economic Growth Plan (EGP), published in February 2018, seeks to stimulate growth in 
the industrial sector, focusing on manufacturing. It establishes various forms of financial incentives 
to support investment by private companies, based on measurable criteria. The EGP constitutes an 
overarching policy framework for other strategies and programmes. The recently -adopted Industrial 
Strategy derives most of its objectives directly from the EGP (see Section 4. 3). As a major 
government initiative, the EGP is expected to fund projects for some EUR 150 million over the next 
five years.  
The support measures envisaged by the EGP are targeted at enterprises that have 
demonstrated success in recent years. A company must meet the following criteria to be eligible for 
financial support: (i) its income in the year preceding the application must have been higher than 
the average  income of the previous three years; and (ii) it must have maintained or increased the WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 number of employees compared to the average number of employees in the previous three years.48 
All firms in North Macedonia, domestic and foreign, are eligible to apply f or support under the EGP, 
except: public enterprises; companies operating in licensed activities and under concessions; 
enterprises benefiting from agricultural subsidies; lawyers, auditors and accounting firms; and 
commercial banks, insurance companies an d funds.  
The EGP envisages three groups of measures (pillars):  
• Pillar 1: general measures to support investment (all enterprises);  
• Pillar 2: measures for improving competitiveness and internationalization (all enterprises); 
and 
• Pillar 3: measures to fost er the development of micro, small and medium enterprises 
(MSMEs).  
The Law on Financial Support for Investments, promulgated in May 2018, regulates support 
measures under Pillars 1 and 2. It establishes the conditions, maximum amounts, time -limits, and 
procedures for granting different types of financial support to companies that invest in North 
Macedonia. Support usually takes the form of cash grants and, in some cases, exemptions from 
income tax (Table A3.1). Pillar 3 measures are covered in the Medium -term Programme for Financial 
Support of Micro, Small and Medium Enterprises (2018 -2020), and are implemented through the 
Fund for Innovation and Technology Development.  
Pillar 1 of the EGP includes financial support measures for the following: creation of  new and 
higher -paid jobs; establishment of technological and research departments; large investment 
projects of significant economic interest to the country; investments in machinery and equipment, 
land and premises; acquisition of companies facing diffic ulties; and establishing and enhancing 
cooperation with suppliers registered in North Macedonia. The latter measure targets companies 
located in TIDZs and new greenfield investors that purchase inputs/products from domestic suppliers 
to be integrated in a final product intended for export. The benefit consists of getting back 1% of 
the total amount spent if at least 15% of the company's production inputs are procured from 
domestic suppliers. The maximum amount allowed is EUR 300,000 per company  per year, an d the 
benefit is available for no more than five years.  
Pillar 2 consists of financial support for companies that increase their market 
competitiveness49, and for companies that gain new markets or increase their sales in new markets. 
In the latter case, t he benefit is the reimbursement of 20% of the costs incurred, up to a maximum 
of EUR 30,000 per company.  
Pillar 3 measures include co -financed grants50 for: (i) fast -growing SMEs ("Gazelles") that 
commit to increasing their annual income and number of empl oyees, both by 20%, within a period 
of 24 months (30% of direct costs, up to EUR 160,000); (ii) micro enterprises that invest in 
technological development (30% of direct costs, up to EUR 80,000); (iii) improvement of innovation 
by SMEs (up to 70% of direct  costs, up to EUR 320,000); (iv) vocational training and practice for 
newly -employed young people (30% of the training costs, or up to EUR 15,000); and (v) preparing 
the legal basis for the development of venture capital (25% of the value of the applicant' s own funds, 
or up to EUR 480,000).  
The measures under Pillar 3 are financed through the Fund for Innovation and Technology 
Development (FITD), which was established in December 2013 to facilitate access to risk capital to 
co-finance innovations by MSMEs. The FITD is financed through a World Bank loan and allocations 
from the national budget; the latter have been increased substantially in the last two years, to fund 
the measures envisaged in the EGP. For 2019, the FITD's total budget amounts to EUR 13.2 mi llion, 
compared to EUR 0.3 million in 2014 (Table 3.10). The FITD offers financing support to companies 
through public calls. The first public call under Pillar 3 was launched in April 2018. As a result, 133 
companies received financing for a total contrac ted amount of EUR 15.9 million, with 88% of the 
                                                
48 The last criterion does not apply to companies in the textile and leather industry.  
49 To be eligible for this b enefit, a company must have increased its sales by at least 5% over the 
average sales level of the previous three years.  
50 Under all these measures, the beneficiary company must finance part of the project.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 them benefitting from co -financed grants for the improvement of innovation, and the rest from 
grants for fast growing companies SMEs. The latest public call was launched in October -
November  2018, and its resu lts were expected to be announced in the first quarter of 2019.  
Table 3.10 Fund for Innovation and Technology Development: annual budget, 2014 -19 
(Euro)  
Year World Bank loan  National budget  Total budget  
2014 162,000  149,236  311,236  
2015 168,699  219,870  388,569  
2016 500,000  231,512  731,512  
2017 1,000,000  228,764  1,228,764  
2018 836,585  3,697,480  4,534,065  
2019 3,777,496  9,415,837  13,193,333  
Source:  Information provided by the authorities.  
The FITD administers four additional co -financing instruments with funds from the World 
Bank: (i) co -financed grants for newly -established enterprises (start -ups and spin -offs) to support 
projects that are in the proof -of-concept phase and up to the close -to-market phase; financing is 
provided for up to 85% of the total budget of the project, with a maximum limit of EUR 30,000; 
(ii) co-financed grants and conditional loans for the commercialization of innovations; this 
instrument supports projects with a cl ear commercialization objective, which are in the prototype 
phase (or appropriate phase depending on the type of innovation) and up to the close -to-market 
phase, by financing up to 70% of the total budget, with a cap of EUR 100,000; (iii) co -financed 
grant s for technology extension, i.e. for adoption and adaptation by SMEs of innovative, advanced 
technologies, know -how and technology processes. It provides financing for up to 50% of the total 
project budget, with a limit of EUR 500,000; and (iv) co -financed  grants for the Establishment, 
Operations and Investments of Business and Technology Accelerators;  whereby support is provided 
for the (optional) establishment and operation of an accelerator, the implementation of a pre -
investment plan, and the investments. Financing is provided for up to 75% of the total budget to a 
maximum of EUR 500,000. A total of 58 companies have benefited from these instruments, of which 
65% have been awarded grants for newly -established enterprises (start -ups and spin -offs).  
North Macedonia notified to the WTO Committee on Subsidies and Countervailing Measures 
the support measu res implemented under the State Budget for 2018 and 2019.51 The 2019 
notification covers measures implemented under the Programme for Competitiveness, Innovation 
and Entrepreneurship, and the Programme for Development in Tourism, administered by the Ministr y 
of Economy, under the following categories: (i) support and development of MSMEs and crafts; (ii) 
implementation of industrial policy; (iii) support and development of cluster associations; (iv) social 
responsibility; and (v) tourism (Table 3.11). The to tal budget for these measures is MKD 79.1 million 
in 2019, compared to MKD 47.1 million in 2018 (it should be noted, however, that no tourism 
incentives were included in the 2018 budget).  
Table 3.11 Summary: support measures under the Programme for Competitiveness, 
Innovation and Entrepreneurship, 2019  
Category of 
support  Policy objective/purpose  Form of 
support  Annual 
budget  
MKD 
Support and 
development of 
MSMEs  Support for: (i ) entrepreneurship and crafts; 
(ii) MSMEs; (iii) women entrepreneurship; (iv) 
artisans; (v) enterprises' competitiveness and 
participation in the market (quality system and 
HALAL certification); and (vi)  professional 
training of MSME employees.  Grant  
(covers 50%, 
60% or 75% of 
expenses, 
depending on 
type of support, 
with caps 
applying per 
company)  41,280,000  
 
Different caps 
per type of 
support  
                                                
51 WTO documents G/SCN/N/315/MKD, 20 March 2018; a nd G/SCM/N/343/MKD, 19 March 2019. N o 
notifications were submitted for the period 2011 to 2017.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 Category of 
support  Policy objective/purpose  Form of 
support  Annual 
budget  
MKD 
Implementation of 
industrial policy  1. Increase businesses' competitiveness in the 
processing industry: (i) techn ical 
documentation for new products; (ii) design 
solutions and/or printing; (iii) market research; 
(iv) energy -efficiency projects and/or 
introduction of ISO 50001; (v)  product -
conformity certificates; (vi) cooperation 
between companies and universities; ( vii) 
expert analysis and preparation of technical 
project documentation or feasibility studies; 
and (viii) project documentation for installation 
of photovoltaic panels for electricity generation 
from renewable energies.  
2. Organize specialized training in the 
processing industry: (i) in the automobile, 
textiles, food -processing and metal -processing 
industries; (ii) vocational training in the leather 
and shoe industry; (iii) on the "greening of 
manufacturing industries"; and (iv) on the 
concept of circula r economy in the 
manufacturing industry.  Grant  
(covers 75% of 
expenses but 
no more than 
MKD 300,000 
per company)  
 
 
 
 
 
 
 
75% of 
expenses  
 3,700,000  
 
Total 1: 
2,500,000  
 
 
 
 
 
 
 
 
 
Total 2:  
1,200,000  
 
Support and 
development of 
cluster 
associations  Support of cluster associations for innovative 
and internationally -oriented business, related 
to: (i) purchase of equipment or technological 
solutions; (ii) collaboration with universities 
and among clusters; (iii)  development of brand 
strategy and brand products;  (iv) joint 
innovative projects for new or improved 
products/processes/services; (vi) specialized 
training; and (vii) promotional activities (fairs, 
B2B, etc.)  Grant  
(covers 75% of 
the project but 
no more than 
MKD 1 million 
per applicant 
and per 
activity)  7,000,000  
Social 
responsibility  Support for development and implementation 
of socially acceptable practices of businesses: 
(i) introduction and certification of a social 
responsibility system; and  
 
(ii) introduction and certification of responsible 
marke t relations.  Grant  
(i) 70% of 
expenses, up to 
MKD 120,000 
per company;  
(ii) 50% of 
expenses, up to 
MKD 27,675 per 
company  1,200,000  
Development in 
tourism  Support for various activities (training, 
promotional campaigns and materials, 
innovation and digitalization, rural tourism, 
etc.) Grant  
50% of 
expenses  26,000,000  
Total for 2019  All support measures listed   79,180,000  
Source:  WTO Secretariat, based on WTO document G/SCM/N/343/MKD, 19 March 2019.  
North Macedonia's industrial policy instruments have been further developed and funded over 
the past few years. The challenges currently facing the authorities are to ensure the effective 
implementation of these instruments, to adequately monitor their results, to strengthen coordination 
among the diffe rent government agencies involved in their implementation, and to avoid overlapping 
between measures and institutional responsibilities.  
3.3.3   Standards and other technical requirements  
The legal framework for the application of technical regulations and standa rds in North 
Macedonia comprises the Law on Standardization52; the Law on Product Safety53; the Law on 
                                                
52 Published in Official Gazette No. 54/2002 and amended in Official Gazette Nos. 84/2012 and 23/2013.  
53 Published in Official Gazette No. 33/06 and amended in O fficial Gazette Nos. 63/07, 24/11, 51/11, 
and 148/11.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 Metrology54; the Law on the Control of Articles of Precious Metals55; the Law on Accreditation56; and 
the Law on Market Surveillance.57 During the review perio d, North Macedonia continued the process 
of harmonizing its technical regulations and standards with relevant EU  rules, with a view to 
preparing itself for accession to the European Union.  
The Ministry of Economy is the main authority responsible for the a doption of technical 
regulations, including the transposition of the EU acquis. It is also the authority responsible for 
notifying the WTO and the EU  Commission on technical regulations. Technical regulations are 
adopted by the Minister of Economy or the m inister authorized by law as the competent authority 
for issues related to the production, marketing and release into free circulation of certain products 
or group of products. The evaluation of compliance with technical requirements is conducted by 
author ized legal entities. The Minister of Economy issues authorizations based on a criterion for 
accreditation in accordance with the Law on Accreditation. The authorized entities have the power 
to issue compliance certificates, upon written application by the interested legal or natural persons. 
North Macedonia acknowledges the foreign compliance documents and markings issued in 
accordance with the international agreements signed and ratified by it.58 
The Standardization Institute of the Republic of North Macedo nia (ISRM), as the national 
standardization body, participates in international, European and regional organizations for 
standardization, promotes standardization activities, and brings together public and private 
stakeholders. It develops and adopts volun tary national standards and acts as the WTO enquiry 
point. It has adopted 28,898 standards, most of which are European standards.59 It is a full member 
of the European Committee for Standardization (CEN) and European Committee for Electrotechnical 
Standardi zation (CENELEC). It is currently implementing its 2018 -20 strategy for the development 
of standardization.  
The Institute for Accreditation of the Republic of North Macedonia (IARM) is responsible for 
the monitoring and control of accredited authorities f or compliance evaluation. It decides on the 
accreditation procedure and oversees compliance with accreditation requirements. The IARM has 
signed agreements with the International Accreditation Forum, the European Cooperation for 
Accreditation, and the Inte rnational Laboratory Accreditation Cooperation. The recognition of 
certificates for ISO 9001 is underway. In 2017, the IARM continued to work on accrediting 
laboratories operating within state -funded higher education facilities and public health institutio ns. 
So far, it has accredited 206 conformity assessment bodies for calibration, testing, medicinal 
laboratories, and product and process certification and inspection.  
The State Market Inspectorate is responsible for the monitoring and control of the 
enforc ement of the provisions of the Law on Product Safety.60 In 2017, it conducted more than 756 
inspections in connection with the Law, (compared with 500 inspections in 2016), mostly on 
household appliances, certain construction products, toys, and children's clothing.61 The 
Inspectorate coordinates its surveillance activities with other inspectorates and customs authorities. 
Pursuant to Article 8 of the Law on Market Surveillance, a National Coordinating Body on Market 
Surveillance was established in May 2018.62 This Body is composed of representatives of various 
state inspection organs and ministries. In addition to the State Market Inspectorate, the members 
of this Coordinating Body are the State Labour Inspectorate, the State Inspectorate for Technical 
Inspect ion, the State Sanitary and Health Inspectorate, the Food and Veterinary Agency, the State 
Environment Inspectorate, the Agency for Electronic Communications, the Customs Administration, 
the Agency of Medicines, the Ministry of Transport and Communication,  and the Ministry of Economy. 
The Coordinating Body signed a memorandum of understanding with the Customs Administration 
                                                
54 Published in Official Gazette No. 55/02 and amended in Official Gazette Nos. 84/07, 120/09,136/11, 
06/12, 164/13, 04/14, 192/15 and 53/16.  
55 Published in Official Gazette No. 23/95 and amended in Offi cial Gazette No. 22/07.  
56 Published in Official Gazette No. 120/2009 and amended in Official Gazette Nos. 53/11, and 41/2014.  
57 Published in Official Gazette No. 48/2010.  
58 Viewed at: http://transparency.cefta.int/tradeportal/Macedonia/en/Technical%20Requirements/ . 
59 The 28,898 adopted standards include 3,049 international standards and 83 national standards.  
60 Viewed at: http://transparency.cefta.int/tradeportal/Macedonia/en/Technical%20Requirements/ . 
61 European Commission, Commission Staff Working Document, The former Yugoslav Republic of 
Macedonia , SWD (2018), 154 final, Strasbourg, 17 April 2018, p.54. Viewed at: 
https://ec.europa.eu/neighbourhood -enlargement/sites/near/files/20180417 -the-former -yugoslav -republic -of-
macedonia -report.pdf . 
62 Decision No. 44 -474311 of 29 May 2018.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 that lays down specific areas for cooperation regarding the control of products that enter the market 
of North Macedonia.  
The Bureau o f Metrology, under the Ministry of Economy, oversees the implementation of the 
Law on Metrology and the Law on the Control of Articles of Precious Metals. It inspects compliance 
with metrology standards, and issues export/import permits for precious metals . It is a member of 
the European Association of National Metrology Institutes, a signatory of the International 
Committee of Weights and Measures Mutual Recognition Arrangement, a member of the 
International Organization of Legal Metrology and an associate  member of European Cooperation on 
Legal Metrology  (WELMEC). The Bureau published its calibration and measurement capabilities in 
the fields of mass, volume and flow and thermometry.  
Food labelling obligations are regulated by the Law on Food Safety63 and related by -laws. The 
labelling requirements are the same for domestic and imported foodstuffs. In addition, imported 
products must display the address of the importer, the place of origin, and the country from which 
the product is imported. In addition to mandatory food labelling requirements set out in a Rulebook 
issued in 200564, labelling requirements defined by food category are prescribed by rulebooks that 
contain specific safety requirements or quality guidelines for particular food products.65 
Since th e last Review, North Macedonia submitted one notification to the WTO Committee on 
Technical Barriers to Trade.66 
The authorities indicated that they aim to achieve full harmonization with the EU acquis  in the 
area of products safety, during the period 2019 -21, particularly through the transposition of EU New 
Approach Directives.67 
3.3.4   Sanitary and phytosanitary measures  
The main laws concerning the application of sanitary, veterinary and phytosanitary measures 
in North Macedonia are the Law on Food Safety68; the Law on Feed Safety69; the Law on Veterinary 
Health70; the Law on Veterinary Medicinal Products71; the Law on Animal By -Products72; the Law on 
Animal Health and Welfare73; the Law on the Identification and Registration of Animals74; the Law 
on Plant Health75; and the Law on Plant Protection Products.76 At the time of writing, a draft law on 
                                                
63 The Food Safety Law was published in Official Gazette No. 157/10 and amended in Offici al Gazette 
Nos. 53/11, 1/12, 164/13, 187/13, 43/14, 72/15, 84/15, 129/15, 213/15, 39/16, and 68/2018.  
64 Published in Official Gazette No. 150/2005.  
65 Viewed at: 
http://www.fva.gov.mk/index.php?option=com_content&view=article&id=210&Itemid=164&lang=mk . 
66 WTO document G/TBT/N/MKD/8, 27 March 2015. This notification concerned the introduction of the 
Draft Law on Construction Products, harmonized with Regul ation (EU) No.  305/2011 of the European 
Parliament and of the Council of 9 March 2011.  
67 The European Commission's 2018 progress report highlights the need for North Macedonia to align its 
regime with the EU General Products Safety Directive and ensure ade quate administrative capacity to enforce 
its legal framework. European Commission, Commission Staff Working Document, The former Yugoslav 
Republic of Macedonia , SWD (2018), 154 final, Strasbourg, 17 April 2018, p.53. Viewed at: 
https://ec.europa.eu/neighbourhood -enlargement/sites/near/files/20180417 -the-former -yugoslav -republic -of-
macedonia -report.pdf . 
68 Published in Official Gazette  No. 157/10 and amended in Official Gazette Nos. 53/11, 1/12, 164/13, 
187/13, 43/14, 72/15, 84/15, 129/15, 213/15, 39/16, and 68/2018.  
69 Published in Official Gazette No. 145/2010 and amended in Official Gazette Nos. 53/2011, 1/2012, 
and 33 /2015.  
70 Published in Official Gazette No. 113/07 and amended in Official Gazette Nos. 24/11, 136/11, 123/12, 
154/15, and 53/16.  
71 Published in Official Gazette No. 42/2010 and amended in Official Gazette Nos. 136/2011, 149/2015, 
and 53/2016.  
72 Published in Official Gazette No. 113/07 and amended in Official Gazette Nos. 144/2014, and 
53/2016.  
73 Published in Official Gazette No. 144/2014.  
74 Published in Official Gazette No. 95/2012 and amended in Official Gazette Nos. 27/2014, 149/2015, 
and 53/2 016. 
75 Published in Official Gazette No. 29/2005 and amended in Official Gazette Nos. 81/08, 20/09, 57/10, 
17/11, 148/11, 69/13, 43/2014, 158/2014, 149/15, 39/16, and 83/18.  
76 Published in Official Gazette, No. 110/07 and amended in Official Gazette Nos. 2 0/09, 17/11, 53/11, 
69/13, 10/15, 129/15 , and 39/16.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 phytopharmacy was under consideration in Parliament. The WTO national enquiry point for sanitary 
and phytosanitary measures is the F ood and Veterinary Agency , and the national notification 
authority is the Ministry of Economy.  
With respect to sanitary and veterinary policy, implementing regulations (rulebooks) were 
adopted during the period under review in relation to the import and transit of live animals an d 
products of animal origin, pursuant to the Law on Veterinary Health, the Law on Food Safety, the 
Law on Animal Health and Welfare, the Law on Feed Safety, the Law on Animal By -Products, and 
the Law on Veterinary Medicinal Products. Rulebooks were also ad opted in relation to the import and 
transit of food of non -animal origin, under the Law on Food Safety. In addition to these rulebooks, 
there have also been temporary bans on the import and transit of food, feed, animals and other 
products, pursuant to Art icle 81(2) of the Law on Veterinary Health and Article 2 of the Law on Food 
Safety. According to information provided by the authorities, 75 rulebooks were adopted during this 
period in the field of sanitary and veterinary policy, and there were 81 tempora ry bans on the import 
and transit of food, feed animals and other products. In the area of phytosanitary measures, 
11 orders for the implementation of international standards were adopted during the period under 
review, on the basis of the Law on Plant Hea lth.   
Most changes made since the previous Review to the regulatory and institutional framework 
for the application of sanitary and phytosanitary measures were aimed at harmonization with 
international norms. In view of the accession process to the Europe an Union, the Government is 
focusing on streamlining practices and implementing various measures related to the EU acquis, 
regarding field inspection services, official controls, food and feed safety, animal disease control, 
plant health and  plant protecti on products, control of veterinary medicinal products, and 
enhancement of border post import control.  
During the period covered by this review, North Macedonia concluded several international 
agreements related to sanitary and phytosanitary measures. In th e areas of food safety and 
veterinary policy, the relevant agreements are the following:  
• the protocol on mutual recognition and acceptance of certificates issued by accredited 
laboratories for food and feed between the Food and Veterinary Agency of the Rep ublic of 
North Macedonia and the Ministry of Foreign Trade and Economic Relations of Bosnia and 
Herzegovina, signed in Skopje on 21 November 2014;  
• the memorandum for cooperation between the Federal Service for Veterinary and 
Phytosanitary Surveillance of t he Russian Federation, the Ministry for Agriculture, Forestry 
and Water Economy of the Republic of North Macedonia, and the Food and Veterinary Agency 
of Republic of North Macedonia, signed on 4 June 2015;  
• the protocol between the Food and Veterinary Agenc y of the Republic of North Macedonia 
and the General Administration for Quality Supervision, Inspection and Quarantine of the 
People's Republic of China, in relation to the health requirements for quarantine applicable 
to frozen lamb meat intended for expo rt from North Macedonia to the People's Republic of 
China, signed 26 November 2015; and  
• the agreement for scientific and technical cooperation between the Food and Veterinary 
Agency of the Republic of North Macedonia and the Directorate General of Animal H ealth 
and Veterinary Medicines and the Directorate -General for Hygiene, Food Safety and Nutrition 
of the Ministry of Health of the Italian Republic in the field of veterinary public health, signed 
in Rome on 18  December 2018.  
 
In the phytosanitary area the  following agreements were concluded:  
• the memorandum for cooperation between the Federal Administration for Veterinary and 
Phytosanitary Supervision of the Russian Federation and the Ministry of Agriculture, Forestry 
and Water Economy and Food and Veterina ry Agency of the Republic of North Macedonia;  
• the protocol between the Plant Health Directorate of the Ministry of Agriculture and 
Environment of the Republic of Serbia and State Agriculture Inspectorate of the Ministry of 
Agriculture, Forestry and Water E conomy of the Republic of North Macedonia for border 
control of railway traffic on the Preshevo –Tabanovce Border Inspection Posts;  
• the agreement between the Government of the Republic of North Macedonia and the 
Government of the Russian Federation for coop eration in the area of quarantine and plant 
protection; and  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 • the agreement between the Government of the Republic of North Macedonia and the 
Government of the Republic of Turkey for cooperation in the area of quarantine and plant 
protection.  
 
3.3.4.1   Sanitary regul ations  
The Food and Veterinary Agency (FVA) is the central competent authority for matters related 
to food and feed safety, veterinary policy, quality of food, animal by -products, and veterinary 
medicinal products. The authorities indicated that steps were  recently taken to improve the FVA's 
capacity to comply with WTO obligations with respect to notifications.77  
The Law on Food Safety regulates the control of safety of food at all stages (production, 
processing, storage, transport, distribution, retail, an d catering). It imposes general and specific 
conditions and obligations for food operators, their registration and approval, conditions for the 
import and export of food of animal and non -animal origin, and official controls and their funding, 
including th e monitoring of residues and prohibited substances.  
The FVA carries out regular official controls on imports of food of non -animal origin, including 
food contact materials, pursuant to Article 88 of the Law on Food Safety. T he controls are carried 
out at a n appropriate place, including the inspection post of entry of the products, the point of 
release for free circulation, warehouses, the premises of the importing business operator, or other 
points in the food chain. Currently, 11 Border Inspection Points o f Entry are in operation on the 
borders with Serbia, Bulgaria, Greece, Albania, and Kosovo. Official controls applied to imports of 
food of non -animal origin include at least a systematic documentary check, a random identity check 
and, where appropriate, a  physical check.  
The FVA recently adopted several food safety monitoring programmes78, which aim to ensure 
continuous monitoring and timely preventive detection of risks to human health, throughout the 
food safety chain. Security monitoring is conducted on  different types or categories of foods, in 
relation to different parameters, and in other stages of the integrated chain. The programmes 
determine the presence and concentration of contaminants in food, the presence of residues of 
pesticides in and on foo d, the migration of certain substances from materials and products that come 
in contact with food, monitor the presence of GMO food, microbiological criteria and other food 
hazards, and the evaluate their impact on human health.79 
3.3.4.2   Veterinary regulations  
The Law on Veterinary Health lays down provisions concerning the organization and 
responsibility of the veterinary service; the principles and procedures for the implementation of 
activities related to the protection of people and animals against diseases tra nsmitted by animals, 
products of animal origin, and animal by -products; and activities for combating contagious animal 
diseases, including zoonosis. It also lays down the measures for the control and eradication of animal 
diseases, and the general conditio ns for the placing on the market, import and transit of animals 
and animal products. The Law on Feed Safety lays down the general rules on feed hygiene, conditions 
and arrangements, ensuring the traceability of feed, and conditions and arrangements for the  
registration and approval of feed establishments. The Law on Animal By -Products regulates the 
categorization, collection, transport, removal, processing, use and storage of animal by -products 
from the aspect of animal health protection, veterinary public health and environmental protection.  
The FVA carries out border veterinary controls on imported and transiting consignments of 
live animals, and animal products and by -products, based on its authority under the Law on Food 
Safety and the Law on Veterinary Health. The import and transit of live animals and products of 
animal origin are permitted only through approved Border Inspection Posts that meet requirements 
defined in the Law on Veterinary Health, regarding specific facilities, suitable equipment and s uitable 
                                                
77 In March 2019, North Macedonia submitted several notifications to the Committee on Sanitary and 
Phytosanitary measures. See WTO documents G/SPS/N/MKD/5 -8, 13 March 2019.  
78 Including a Monitoring Progra mme for food safety 2019 (Official Gazette No. 8/2019) and a 
Monitoring Programme for the control and prevention of individual physical, chemical and biological hazards in 
certain types or categories of food (Official Gazette No. 13/2019).  
79 Food and Veter inary Agency online information. Viewed at: 
http://www.fva.gov.mk/index.php?lang=mk . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 expert personnel necessary for carrying out veterinary inspections. Veterinary border controls on 
live animals and products of animal origin are carried out at ten designated Border Inspection Posts. 
During import, animals, and animal products and by-products are subject to a documentary check, 
an identity check and a physical check by an official veterinarian at the Border Inspection Post. 
Consignments in transit are subjected to a documentary check, an identity check and, if necessary, 
a physical check.  
Animals, and animal products and by -products may be imported into North Macedonia under 
the following conditions: (a) they originate from a country or part of a country authorized to export 
the animal species or category of animal products or by -products to North Macedonia; (b) in the 
case of animal products and by -products, they were produced in an establishment authorized to 
export the respective category of animal products or by -products to North Macedonia; and (c) they 
are accompanied by a health  certificate or other document. Imports of animals, or animal products 
or by -products may be banned, or conditions for imports may be amended, by decision laid down 
by the Chief Veterinary Officer in the case of an outbreak of a contagious animal disease o r any 
other incident in the country of origin which may pose a risk to animal or public health in North 
Macedonia.  
Food of animal origin may be imported into North Macedonia if: (a) it originates from an EU 
member State or part thereof, or a third country  or part thereof which appears on the list of third 
countries from which the import into the European Union is approved, and the concerned list is 
prepared and updated by the European Commission; (b) it originates from a third country  or part 
thereof which  appears on the list prepared and updated by the FVA. The third country is put on the 
list if it was subject to control by the European Union or the FVA and, during the control, it was 
confirmed that the suitable guarantees were met. The third country is p ut on the list without being 
subject to control if the FVA, based on an analysis of the documentation, establishes that those 
suitable guarantees are met; (c) the establishment from which the product was dispatched and the 
establishment in which the produc t was obtained, prepared or stored, are present on the list of 
establishments of the EU member States , the list of establishments of third countries from which 
the import into the European Union is approved, and which is prepared and updated by the Europea n 
Commission, and on the list of approved establishments of third countries prepared by the FVA.  
3.3.4.3   Phytosanitary regulations  
The phytosanitary regulatory system of North Macedonia is composed of the following 
competent authorities: (a) the Phytosanitary Di rectorate; (b) the State Phytosanitary Laboratory; 
(c) the State Agriculture Inspectorate; and (d) the Directorate for Seeds and Seedling Materials.  
The Phytosanitary Directorate is a body within the Ministry of Agriculture, Forestry and Water 
Economy, an d is responsible for the development of national policy and legislation with respect to 
plant health, plant protection products, and fertilizers. It is also responsible for the coordination and 
exchange of information among state authority bodies; deciding  on administrative procedures for 
issues in the areas of plant health, plant protection products and fertilizers; relations with the 
European Union; and implementing the international conventions, agreements and contracts 
regarding plant health which North  Macedonia has ratified.  
The State Phytosanitary Laboratory is a body within the Ministry of Agriculture, Forestry and 
Water which conducts laboratory activities (analyses of pesticide formulation and residues of plant 
protection products, seeds, and diagn osis of samples of plant harmful organisms) according to 
annual phytosanitary monitoring programmes and monitoring programmes for plant protection 
products and residues of plant protection products in primary agricultural products, and tests seeds 
and seed ling materials.  
The State Agriculture Inspectorate is responsible for the control of food safety in the primary 
production of food of plant origin, plant health, and the implementation of measures for the 
prevention and containment of harmful organisms. I t carries out controls pursuant to the Law on 
Plant Health, the Law on Plant Protection Products, the Law on Seeds and Seedlings, and the Law 
on New Plant Varieties. The Phytosanitary Inspection Department, under the State Agriculture 
Inspectorate, is resp onsible for internal and border phytosanitary inspection. It also issues 
phytosanitary certificates for the import and export of plants, plant products and plant protection 
products.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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The Directorate for Seeds and Seedling Materials is a body within the Mi nistry of Agriculture, 
Forestry and Water Economy which develops policy and legislation in the area of seeds and 
propagation material.  
Imports of certain types of plants, plant products and other controlled items, agricultural 
reproduction material, fores t reproduction material, and means of protection of plants are subject 
to inspection at the point of entry. Provisions for conducting official import and export controls for 
plant health are laid down in the Laws on Plant Health; Plant Protection Products (based on EU 
Directive 91/414/EC); Fertilizers; Seed and Seedlings; and Protection of New Plant Varieties.80 
The authorities indicated that the following legal acts were adopted during the period under 
review, on the basis of the Law on Plant Health (Table 3.12).  
Table 3.12 Legal acts adopted on the basis of the Law on Plant Health  
Title of legal act  Publisher  Link 
Order for implementation of international 
standard for pest risk analysis for quarantine 
pests No. 11  (Official Gazette  
No. 35/2014)  http://ldbis.pravda.gov.mk/PregledNaZa
kon.aspx?id=31077  
Order for implementation of international 
standard for categorization of commodities 
according to their pest risk No. 32  (Official Gazette  
No. 44/2018)  https://www.akademika.com.mk/daisyI
mg/eJurist -mk/191062 -
ejst/version/2/part/5/data  
Order for implementation of international 
standard for methodologies for sampling of 
consignments No. 31  (Official Gazette  
No. 52/2013)  http://ldbis.pravda.gov.mk/PregledNaZa
kon.aspx?id=2806 8  
Order for implementation of international 
standard for pest -free potato, 
micropropagative material and minitubers 
intended for international trade No. 33  (Official Gazette  
No. 26/2013)  http://ldbis.pravda.gov.mk/PregledNaZa
kon.aspx?id=27668  
Order for implementation of international 
standard for guidelines for the notification of 
non-compliance and emergency action No. 13  (Official Gazette  
No. 26/2013)  http://ldbis.pravda.gov.mk/PregledNaZa
kon.aspx?id=29674  
Order for implementation of international 
standard for requirements for the 
establishment of pest -free areas No. 4  (Official Gazette  
106/2014)  http://ldbis.pravda.gov.mk/PregledNaZa
kon.aspx?id=32680  
Order for implementation of international 
standard for guidelines for the determination 
and recognition of equivalence of 
phytosanitary measures No. 24  (Official Gazette  
No. 73/2017)  http://www.slvesnik.com.mk/Issues/d3
7b3bf02fdf457fa8440930ea4773bd.pdf  
Order for implementation of international 
standard  for regulation of wood packaging 
material in international trade No. 15  (Official Gazette  
No. 183/2013)  http://ldbis.pravda.gov.mk/PregledNaZa
kon.aspx?id=30283  
 
Order for implementation of international 
standard for guidelines for surveillance No. 6  (Official Gazette  
No. 26/2013)  http://ldbis.pravda.gov.mk/PregledNaZa
kon.aspx?id=27665  
Order for implementation of international 
standard for using of integrated measures in a 
systems approach for pest risk management 
No. 14  (Official Gazette  
No. 136/2013);  http://ldbis.pravda.gov .mk/PregledNaZa
kon.aspx?id=29533  
Order for implementation of international 
standard for requirements for the 
establishment of pest -free places of 
production and pest -free production sites 
No. 10 (Official Gazette  
No. 123/2014)  http://ldbis.pravda.gov.mk/PregledNaZa
kon.aspx?id=33355  
Order for implementation of international 
standard for requirements for the 
establishment of areas of low pest prevalence 
No. 22  (Official Gazette  
No. 134/ 2017)  http://www.slvesnik.com.mk/Issues/43
9f255dcdfd4ed3a318431b661545a5.pdf  
Source:  Information compiled by the WTO Secretariat, based on information provided by the a uthorities.  
Imports  of agricultural and forest plants, plant products, and seeds and plant propagating 
materials may be conducted only at the border crossing points specially assigned to perform 
phytosanitary checks in accordance with annual monitoring pro grammes. Importers are initially 
required to submit an Inspection Control Application, followed by quarantine pest sampling. Certified 
seeds and propagating material undergo phytosanitary inspection during vegetation periods by 
                                                
80 CEFTA online information. Viewed at: 
http://transparency.cefta.int/tradeportal/Macedonia/en/Phytosanitary/ . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 institutions appointed by th e Minister of Agriculture, Forestry and Water Management, as well as by 
laboratories carrying out the analyses. In general, for imports of plants, plant products, and seeds 
and plant propagating materials plants, a Phytosanitary Certificate issued by the M inistry of 
Agriculture is required; there are no exceptions to this requirement. North Macedonia does not 
require additional certificates or sanitary registrations for products confirmed to be safe by 
recognized international authorities.  
With respect to c ertain issues raised in the 2018 European Commission report on 
enlargement81, the authorities indicated that several steps were recently taken to strengthen the 
capacity of the Phytosanitary Inspectorate to collect and analyse data, to develop a phytosanita ry 
information and communication system, to enhance the effectiveness of phytosanitary inspection, 
and to meet international standards regarding the determination of pest status.  
3.3.5   Competition policy, state aid and price controls  
3.3.5.1   Competition policy  
The main legal acts governing competition policy are the Law on the Protection of 
Competition (LPC) and the Law on State Aid Control, both published in 2010.82 In 2012, several by -
laws were adopted as part of efforts to harmonize national legislation with the EU acquis.83 A number 
of guidelines for the assessment of concentrations, the preparation of notifications, the identification 
of bid -rigging, leniency procedures and other matters were published during the period under review. 
An important legislative change was  the 2014 amendment of the Criminal Code in order to align it 
with the LPC, thereby allowing for the application of leniency procedures. According to the European 
Commission, North Macedonia's laws in this area are broadly aligned with EU competition rules  and 
the SAA (Article 69), but significant efforts are needed to strengthen the enforcement record and 
the expertise of the competition authority.84  
The Commission for the Protection of Competition (CPC), an independent state authority 
with legal status, i s responsible for implementing competition rules. It may act upon request by an 
interested party or on its own initiative. It has exclusive jurisdiction to investigate breaches of 
competition law, make final decisions, and approve or prohibit concentration s of undertakings 
(mergers, joint ventures, acquisition of control). As part of its investigative powers, it can issue 
requests for information, hold oral hearings, and order in -situ inspections and other measures to 
collect evidence. If it finds a breach,  the CPC is empowered to impose fines or accept commitments. 
Its decisions may be appealed before the Administrative Court. Other functions of the CPC are 
proposing secondary legislation, issuing opinions on draft laws that may impact competition, and 
carrying out analysis of competition conditions in particular markets.  
The LPC regulates anti -competitive behaviour and concentrations. It applies to all forms of 
prevention, restriction or distortion of competition that produce effects in the territory of Nor th 
Macedonia, even if they are caused by acts carried out outside the country. Its rules are applicable 
to private and public undertakings, and to undertakings with special or exclusive rights, except where 
their application would obstruct the performance of the tasks assigned to them. The Law does not 
contain industry -specific provisions, and it applies to all sectors, including the regulated sectors, 
such as banking, insurance, energy, and telecommunications. In such instances, the CPC works in 
cooperatio n with the sector regulators.  
                                                
81 European Commission, Commission Staff Working Document, The former Yugoslav Republic of 
Macedonia, SWD (2018), 154 final , Strasbourg, 17 April 2018, p.65. Viewed at: 
https://ec.europa.eu/neighbourhood -enlargement/sites/near/files/20180417 -the-former -yugoslav -republic -of-
macedonia -report.pdf . 
82 The LPC was published in Official Gazette No. 145/2010 and amended in Official Gazette 
Nos. 136/2011,41/14, 53/16, and 88/18. The Law on State Aid  Control was published in Official Gazette 
No. 145/2010.  
83 These by -laws concern mainly condition s for block exemptions for different types of agreements. 
Published in the Official Gazette Nos. 41/12, 42/12, and 44/12.  
84 European Commission, Commission Staff Working Document, The former Yugoslav Republic of 
Macedonia, SWD (2018), 154 final , Strasbourg , 17 April 2018, p. 60. Viewed at: 
https://ec.europa.eu/neighbourhood -enlargement/sites/near/files/20180417 -the-former-yugoslav -republic -of-
macedonia -report.pdf . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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The Law prohibits agreements, decisions and concerted practices between undertakings 
which have as their object or effect the distortion of competition, and provides an illustrative list of 
these agreements, which are to be co nsidered null and void.85 However, any determination that a 
prohibited agreement/decision/practice is in place is subject to prior investigation by the CPC and 
an assessment of its effects on the relevant market. The prohibition does not apply to agreements , 
decisions and/or concerted practices that contribute to the improvement of the production or 
distribution of services, or to the promotion of technical or economic development, provided certain 
conditions are met (including that consumers have a fair sha re of the resulting benefit).86 The CPC 
may decide not to apply the prohibition to a particular agreement or practice, if it deems it necessary 
for protecting the public interest. Also, as a general rule, the prohibition will not apply to agreements 
of "min or importance" (i.e. if the joint market share of the undertakings in the agreement does not 
exceed certain thresholds).  
An undertaking is presumed to have a dominant position if its share of the relevant market 
amounts to more than 40%. Having a dominant position is not prohibited per se . The LPC specifies 
the situations in which the abuse of dominant position in the relevant market, or a substantial part 
thereof, is prohibited. These include the imposition of unfair purchase/selling prices or other unfair  
conditions; limiting production, markets or technical development to the prejudice of consumers; or 
applying different conditions to equivalent legal transactions with other trading partners, thereby 
putting them at a disadvantage.87 
The legislative framew ork provides for the ex ante  control of mergers. Prior notification to 
the CPC is required where a concentration resulting in a permanent change of control meets the 
following thresholds:  
• the aggregate worldwide turnover of all the participants in the pre ceding accounting year is 
at least the MKD equivalent  of EUR 10 million, and at least one participant is registered in 
North Macedonia; and/or  
• the aggregate turnover of all participant undertakings in North Macedonia was at least the 
MKD equivalent  of EUR 2.5 million in the preceding accounting year; and/or  
• one of the participants has a market share in North Macedonia exceeding 40%, or the 
participants have a combined market share exceeding 60%.  
The CPC must decide whether the notified concentration compli es with the Law (Phase 1) or 
whether a more in -depth investigation (Phase 2) is needed; time -limits apply in both cases. If the 
CPC fails to decide within the prescribed time -limits, the concentration will be deemed to be 
compliant. The LPC prohibits conce ntrations that significantly impede effective competition in the 
domestic market, or a substantial part thereof, in particular as a result of the creation or 
strengthening of a dominant position. The participants to a concentration can enter into a 
commitm ents arrangement with the CPC during Phase 2; this may include divestiture, removing 
links between the parties to the concentration, or structural remedies (e.g. granting access to key 
infrastructure). The CPC may clear the concentration, with or without c onditions, or prohibit it.  
The CPC has the power to impose sanctions if it determines a breach of the Law. It can 
impose a fine of up to 10% of the annual turnover in the preceding accounting year on an 
undertaking that has: i) concluded or taken part in a  prohibited agreement decision or practice 
leading to distortion of competition; ii) abused its dominant position; iii) failed to implement interim 
measures; or iv) failed to apply the measures decided by the CPC to eliminate the harmful effects 
arising fr om the misdemeanor. F ailure to notify the CPC of a concentration, or the implementation 
of a transaction before obtaining approval or after it has been prohibited, carry a fine of up to 10% 
of the worldwide turnover of the undertaking in the preceding acco unting year. Moreover, the CPC 
                                                
85 Article 7 of the LPC.  
86 Block exemptions apply to: i) vertical agreements for the exclusive right of distribution, the selective 
right of distribution, or the exclusive right of purchasing and franchising; ii) horizontal agreements for research 
and development or specialization; iii) agreements for the transfer of technology, licence or know -how; 
iv) agreements for the distribution and repair of motor vehicles; v) insurance agreements; and vi) agreements 
in the transport sector. Article 9 of the LPC.  
87 Article 11 of the LPC.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 can order the transaction to be unwound, and/or temporarily prohibit the activity of the undertaking 
involved (from 3 to 30 days for legal entities and from 3 to 15 days for natural persons).  
The LPC provides for a leniency p olicy. Upon the request of an undertaking that has admitted 
its participation in a cartel, the CPC may grant full or partial leniency. Full leniency is granted if the 
undertaking is first to present the necessary evidence enabling the initiation or complet ion of a cartel 
investigation, and meets certain conditions. Partial leniency is granted to parties that subsequently 
cooperate with the investigation by submitting additional evidence, provided they also meet the 
prescribed conditions. Since its inception  in 2010, the leniency policy has not been used.  
Any person who suffers harm resulting from a breach of the LPC may claim damages in a 
civil proceeding at the relevant courts. The damages are determined and assessed in accordance 
with the rules of civil la w. The Criminal Code provides for criminal liability relating to cartels in the 
case of individuals. A responsible person within a legal entity who concluded or participated in a 
prohibited agreement, decision or practice with the aim of preventing or limi ting competition is liable 
for imprisonment from one to ten years. However, the responsible person can be released from 
imprisonment if the CPC grants leniency to the legal entity.  
During the review period, the CPC maintained a significant level of activi ty. It adopted a total 
of 269 decisions concerning concentrations, cartels and abuse of dominant position between January 
2013 and December 2018 (Table 3.13). Most of the decisions dealt with concentrations, and their 
number has risen in the last years. Th e maximum fine, equivalent to 10% of annual turnover, was 
applied for the first time in 2017. Notwithstanding this positive record of activity, there seems to be 
room for further strengthening the CPC's enforcement record, including through the implementat ion 
of the leniency policy.88 
Table 3.13 Decisions by the Commission for the Protection of Competition, 2013 -18 
 2013  2014  2015  2016  2017  2018  
Concentrations  18 30 42 31 50 61 
Cartels (forbidden agreement)  2 4 3 3 6 4a 
Abuse of dominant position  3 4 3 2 1 2 
Total  23 38 48 36 57 67 
a The existence of abuse of dominant position and of a forbidden agreement were determined in the 
same decision.  
Source:  Information provided by the authorities.  
The CPC is mandated by law to cooperate with the competition authorities of other countries. 
Accordingly, it has signed MoUs with the competition agencies of Serbia; Croatia; Bulgaria; Bosnia 
and Herzegovina; Turkey; the Russian Federation; and Kosovo, and  it is currently negotiating MoUs 
with the competition authorities of Ukraine, Georgia, and Montenegro. Domestically, the CPC has 
concluded MoUs with the Ministry of the Interior, the Public Procurement Bureau, and several 
sectoral regulatory agencies (i.e . audio -visual and media services; electronic communications; 
railways; energy; and postal services).  
3.3.5.2   State aid  
State aid, which represented 0.2% of GDP in 2017 and 2018, is also under the purview of 
the CPC, in accordance with the Law on State Aid Contr ol and its by -laws. These laws have 
transposed relevant EU rules in this area. In 2014, several regulations were enacted to enhance the 
legal framework; these include: the Regulation on the manner and procedure of notification of state 
aid, as well as the procedure for monitoring existing state aid ; the Regulation on conditions and 
procedure for granting horizontal aid; the Regulation on establishing conditions and procedure for 
granting regional  state aid;  the Regulation on the conditions and procedure for granting aid of minor 
                                                
88 European Commission, Commission Staff Working Document, The former Yugoslav Republic of 
Macedonia, SWD (2018), 154 final , Strasbourg, 17 April 2018, p. 61. Viewed at: 
https://ec.europa.eu/neighbourhood -enlargement/sites/near/files/20180417 -the-former -yugoslav -republic -of-
macedonia -report.pdf . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 importance ( de minimis ); and the Regulation on establishing conditions and procedure for granting 
aid for rescue and restructuring of firms in difficulty.  
The Law on State Aid Contro l applies to any form of aid granted by state aid providers in 
any economic sector, except agriculture and fisheries. Providers of state aid must notify to the CPC 
their plans to grant new state aid or alter existing state aid, for assessment of compliance  with the 
law. State aid measures are notified and assessed as part of support schemes, or as individual 
measures if they are not included in a scheme. If a state aid measure is not notified, the CPC may 
investigate it ex post  and, if it finds the measure to be incompatible with the Law on State Aid 
Control, it has the power to order its recovery.  
In 2015, the CPC adopted 25  positive decisions on state aid, most of them supporting foreign 
investors operating in the TIDZs. The number of decisions dropped to  13 in 2016 and to 6 in 2017 
but increased to 21 in 2018. With only four officials, the CPC is understaffed. According to the 
European Commission, the CPC's enforcement capacity is inadequate to deal with the growing 
number of state -aid cases; the Commissi on also identified the need to increase the transparency of 
state aid granted, and to ensure that it is free from conflicts of interest.89  
3.3.5.3   Price controls  
Price controls apply, in the form of regulated and approved prices (not direct controls), on a 
few pro ducts and services, which are characterized by monopolistic supply conditions. Prices in the 
energy sector (oil derivatives and electricity for universal/last -resort suppliers) and prices of 
telecommunications and postal services are regulated.  
3.3.6   State trad ing, state -owned enterprises, and privatization  
North Macedonia notified the WTO that, during the period under review, it did not maintain 
any state trading enterprises within the definition contained in paragraph 1 of the Understanding on 
the Interpretati on of Article XVII of the GATT.90  
Under the Law on Privatization of State Capital91 and the Law on Transformation of 
Enterprises with Social Capital92, a wave of privatizations of state -owned enterprises (SOEs) took 
place during the 1990s. The process is now  nearly complete, with some remaining SOEs operating 
in sectors such as energy, transportation, and water supply. Both domestic and foreign investors 
may participate in privatizations through public call procedures.  
The main developments concerning SOEs d uring the period under review include: the 
formation of a strategic partnership between a state -owned tobacco producer (Tutunski Kombinat 
AD Prilep) and an international tobacco company (2014), through which the latter acquired a 51% 
stake in the new compa ny; the sale of the Government's shares (33%) in Poshtenska Banka, which 
thereupon became 100% privately -owned (2014); and the initiation of bankruptcy proceedings in 
two industrial SOEs (electronic manufacturer JSC EMO OHRID and chemical producer JSC OHIS ) in 
2016.  
The Commission for Privatization is the main government institution in charge of 
administering state capital and SOE matters. It has the power to propose the sale of shares of state 
capital in enterprises, and the appointment of government representatives in state enterprises. The 
Ministry of Economy is responsible for the sale of state capital declared in shares and stakes in 
enterprises, and the Ministry of Finance is responsible for the sale of state -owned in banks and 
                                                
89 European Commission, Commission Staff Working Document, The former Yugoslav Republic of 
Macedonia, SWD (2018), 154 final , Strasbourg, 17 April 2018, p. 61. Viewed at: 
https://ec.europa.eu/neighbourhood -enlargement/sites/near/files/20180417 -the-former -yugoslav -republic -of-
macedonia -report.pdf . 
90 WTO documents G/STR/N/16/MKD/Rev.2, 9 May 2018; and G/STR/N/17/MKD, 27 July 2 018. 
91 Official Gazette Nos. 37/1996, 25/1999, 81/1999, 49/2000, 6/2002, 74/2005, 123/2012; and 
166/2014.  
92 Official Gazette Nos. 38/1993, 48/1993, 21/1998, 25/1999, 39/1999, 81/1999, and 49/2000.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 financial institutions.93 The State Pension and Disability Insurance Fund is responsible for the 
management of the shares and stakes of state capital that are transferred to it.  
There is no published list of SOEs. The authorities indicated that there are currently 57  SOEs, 
of which 16, most ly public utilities, are wholly -owned by the State (Table 3.14). The remaining 41 
are partially state -owned, with state shares ranging from less than 1% to 99%; among these are 
several public utility enterprises owned by local governments.94 
The state enter prises with the largest share of state capital are: ELEM (electricity producer), 
T-mobile (telecommunications), MEPSO (electricity transmission system operator), Tutunski 
Kombinat AD Prilep (tobacco company), and Macedonian Railway Transport AD Skopje. As at 
February 2019, state capital in these companies amounted to EUR 883,43 million, or 8.27% of GDP. 
State capital in the remaining SOEs represented 2.42% of GDP.95 
Table 3.14 State -Owned Enterprises, 2019  
Type of ownership  Number  
Enterprises fully owned by the State:  Macedonian Post; Macedonian Bank for 
Development Promotion; ELEM; MEPSO; MIA; Eurocompozit AD Prilep; TEC 
Negotino; Energetika AD Skopje; Agri lend Skopje; Drzavna lotarija na Makedonija; 
M-HAB AD Skopje; Macedonian Airport AD Skopje; Macedonian Railway Transport 
AD Skopje; Public Housing Company AD Skopje; Housing and Real Estate Company 
AD; and Water Supply of Macedonia AD.  16 
Enterprises partially owned by the State  41 
Enterprises with less than 1% of state capital  24 
Enterprises with state capital of between 1% and 10%  8 
Enterprises with state capital of between 10% and 99%  9 
Total number of SOEs (full or partial state ownership)  57 
Nominal value of the state capital in all the enterprises  EUR 1,141.84 million  
State capital as a percentage of GDP  10.69%  
Source:  Information provided by the authorities.  
Pursuant to the Constitution of North Macedonia, the same terms of competition apply to 
both private and public enterprises, with respect to access to markets, credit and other business 
operations. SOEs also receive the same tax treatment as private compan ies, and are not granted 
special advantages such as preferential access to land or raw materials. Nevertheless, SOEs maintain 
close ties to the Government; their boards of directors are commonly appointed by the Government, 
and so are their general manager s, who regularly report to government ministers. North Macedonia 
is not a signatory to the OECD Guidelines on Corporate Governance for SOEs.   
3.3.7   Government procurement  
The value of government procurement in North Macedonia amounted to MKD  38,2 billion, or 
6% of GDP, in 2017. This was a significant decrease from 2016, when the value of public contracts 
awarded was MKD 58.8 billion (10% of GDP).  
In February 2017, North Macedonia submitted its application for accession to the WTO 
Agreement on Government Procurem ent (GPA)96, together with its replies to the Checklist of issues 
for provision of information relating to accession to the GPA. In February 2018, it submitted its initial 
market access offer to accede to the revised GPA to the Committee on Public Procureme nt. Several 
GPA parties provided comments on the offer. At the time of writing this report, negotiations on the 
accession of North Macedonia to the GPA were ongoing.  
North Macedonia's public procurement system is decentralized. Until 31 March 2019, it was 
regulated by the Law on Public Procurement (LPP), which entered into force in 2008.97 Some of the 
amendments introduced to the LPP during the period under review relate to the establishment of 
                                                
93 Articles 5 and 9 of the Law on Privatization of State Cap ital. 
94 Information on state capital in SOEs is with the Central Securities Depository.  
95 Information provided by the authorities.  
96 WTO document GPA/143, 17 March 2017.  
97 The LPP was published in Official Gazette No. 136/07, and was amended and supplement ed in 2008, 
2009, 2011, 2013, 2014, 2015, 2016 and 2017.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 the lowest price criterion as the default award criterion, the i ntroduction of the negative reference 
list (blacklisting) of suppliers, and the introduction of provisions on criminal offences. The LPP is 
supplemented by several by -laws, regulations and manuals.  
In January 2019, the Parliament adopted a new Law on Publ ic Procurement (new LPP), which 
transposes several EU directives on public procurement (2014/24/EU, 2014/25/EU and 
2007/66/EC).98 The new LPP entered into force on 1 April 2019, although some of its provisions will 
not become applicable until 2020. The obje ctive of the new LPP is to strengthen transparency and 
control over procurement procedures, while at the same time streamlining them and making them 
easier to apply. While the general structure and content of the previous Law remain essentially the 
same, s ome significant changes were introduced by the new LPP (Box 3.1).  
Box 3.1 Main changes introduced by the new Law on Public Procurement  
Some of the main changes introduced by the new Law on Public Procurement, a pproved in January 2019 and 
published in Official Gazette No. 24/19, include the following:  
 
• the obligation by contracting authorities to publish public contracts and all pertaining documentation 
for each individual procurement procedure on the Electronic System for Public Procurement;  
 
• the possibility for quality to be evaluated, in addition to price (previously the lowest price was the 
default award criterion);  
 
• e-auctions are no longer mandatory but remain an option;  
 
• the thresholds for the application of the Law were increased;  
 
• the manner of carrying out small -value procurement was clarified, and an obligation by the 
contracting authorities to report small -value procurement was introduced;  
 
• an e-market place for small -value procurement was created, in the form of an e -catalogue;  
 
• innovation partnership was introduced as a new procurement procedure;  
  
• ex-ante control by the Public Procurement Bureau was introduced for large -value procurements and 
for procurements selected through risk assessment and pri nciples stipulated in the law; and  
 
• new provisions for the promotion of socially and environmentally responsible procurement.  
Source:  WTO Secretariat.  
The Public Procurement Bureau (PPB), under the Ministry of Finance, is responsible for 
monitoring the im plementation of the LPP, and for developing the public procurement system. Its 
responsibilities include normative issues, the development of e -procurement technologies, 
international cooperation and EU integration matters. The State Appeals Commission, an 
independent body established in 2008, is competent to carry out review proceedings relating to 
public procurement. The Public Procurement Council, established in 2013 with ex-ante control 
competencies (i.e. its consent was required, in certain cases, befor e procuring entities could issue a 
public procurement notice), was abolished in November 2017.99 The Ministry of Economy is the 
competent authority regarding concessions and public -private partnerships (PPPs).  
The PPB manages the Electronic System for Publ ic Procurement (ESPP), available online to 
procuring entities and economic operators.100 Most activities related to the procurement process are 
performed through the ESPP, including the publication of contract notices and tender documentation, 
submission of tenders, public opening and evaluation, decision making, contract award notices, e -
auctions, and cancellation of procedures. Prior registration with the ESPP is required to participate 
in public tenders, and a small user fee is charged.101 A legal amendment in 2015 made it mandatory 
                                                
98 The new LPP was published in Official Gazette No. 24/19.  
99 Official Gazette No. 165/2017.  
100 The ESPP website. Viewed at: https://e -nabavki.gov.mk . 
101 The annual registration fee is: MKD 2,000 for physical persons and micro enterprises; MKD 4,000 for 
small and medium enterprises; and MKD 8,000 for large enterprises and foreign economic operators.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 for contracting authorities to use the ESPP for e -tendering in all contract notices published as of 
2018.  
The principle of non -discrimination and equal treatment for local and foreign economic 
operators in public procurement procedures is enshrined in the LPP. The Law also ensures the 
principles of competition among economic operators, transparency and integrity, and the rational 
and efficient use of funds in awarding public procurement contracts. These principles were retaine d 
in the new LPP.  
The new LPP covers the procurement of goods/supplies, services and works by central and 
local authorities, public companies and any entity receiving public funds (collectively known as 
"contracting authorities").102 The central and local go vernment authorities, the legal entities pursuing 
public interest needs, and the associations owned by the former are called the "classical sector", 
while the public enterprises and legal entities with special or exclusive rights to carry out certain 
activities are known as "utilities".103 
Procurements excluded from the application of the law are, inter alia , certain defence 
contracts; contracts classified as "state secret"; the acquisition or rental of land; radio and TV 
programmes; arbitration services; law yer and notary services; employment contracts; contracts 
with funds provided by international organizations; and procurement among contracting entities 
under certain conditions.104 
The LPP applied to all procurements of a value exceeding the MKD equivalent o f EUR 500 on 
a monthly -basis, excluding VAT105, except in the case of some utility contracts. The new LPP 
increased the minimum thresholds for its application, as shown in Table 3.1 5. Notices and award 
notices for procurement procedures with an estimated val ue equal to or greater than the thresholds 
in Table 3.15 must be published on the ESPP.  
Table 3.15 Minimum thresholds for application of the new Public Procurement Law  
 Type of procuring authority  
Type of procurement  Classical sector  Utilities  Utilities with dominant 
private capitala  
Goods and services        ≥ EUR 1,000  ≥ EUR 2,000        ≥ EUR 400,000  
Works  ≥ EUR 5,000  ≥ EUR 10,000  ≥ EUR 5,000,000  
Social and other specific services  ≥ EUR 10,000   ≥ EUR 20,000  ≥ EUR 1,000,000  
a Utilities with dominant private capital that perform a covered activity under special or exclusive 
rights.  
Source:  Information provided by the authorities.  
Under the previous LPP, the procurement procedures were classified a s follows: open 
procedure, restricted procedure, competitive dialogue, negotiated procedure with prior publication 
of a contract notice, negotiated procedure without prior publication of a contract notice, simplified 
competitive procedure, and design conte st.  
The new LPP establishes the following procurement procedures: low -value procurement, 
simplified open procedure, open procedure, restricted procedure, competitive procedure with 
negotiation, competitive dialogue, innovation partnership, negotiated proc edure with publication of 
a contract notice, and negotiated procedure without prior publication of a contract notice. The new 
LPP also provides for special methods for awarding public contracts, including framework 
agreements; dynamic purchasing systems; e lectronic auctions; electronic catalogues; and 
centralized purchasing.106   
                                                
102 Article 9 of the new LPP.  
103 Utility contracts are publi c contracts awarded for the purpose of carrying out activities related to gas 
and heat, electricity, water supply, transport services, ports and airports, postal services, extraction of oil and 
gas, and exploration/extraction of coal and other solid fuels.  Chapter 3 of the new LPP.  
104 Exclusions from the Law's scope are stipulated in Articles 7, 8, 9, 10, 10 -a, 10-b, and 11 of the LPP. 
In the new LPP, the relevant provisions are contained in Articles 22 -26. 
105 All thresholds mentioned in this Section exclude VAT. 
106 Procurement procedures are stipulated in Title III, Chapters 1 and 2 of the new LPP.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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Normally, a contracting authority awards a contract using the open procedure or the 
restricted procedure (this entails a pre -qualification phase). However, in certain cases prescribe d by 
the Law, a contracting authority may apply other procurement procedures. The competitive dialogue 
may be used if the public contract is particularly complex, and the implementation of an open or 
restricted procedure would not allow the public procurem ent contract to be awarded. The competitive 
procedure with negotiation can be used by contracting authorities of the classical sector in certain 
cases, such as when: the needs of the contracting authority cannot be met without adaptation of 
readily -availab le solutions; the subject matter of the procurement includes design or innovative 
solutions; due to its complexity or the legal and financial characteristics of the contract, it cannot be 
awarded without prior negotiation; or the technical specifications c annot be established with 
sufficient precision. Utilities may use this procedure if they choose to do so.  
The new LPP establishes the low -value procurement procedure to be used for procurements 
with an estimated value of up to the MKD equivalent of EUR 10 ,000 for goods and services and up 
to EUR 20,000 for works. The simplified open procedure is used for procurement of goods and 
services with an estimated value of up to EUR 70,000, and up to EUR 500,000 for works. It is similar 
to the open procedure, but t he time -limit for submitting bids is shorter, and bidders can prove 
capacity and qualification requirements through self -declaration. An additional procurement 
procedure in the new LPP is the innovation partnership, which may be used by a contracting autho rity 
if it needs innovative products, services or works that cannot be met by the procurement of products, 
services or works already available on the market.107 Another addition in the new LPP is the power 
granted to the Public Procurement Bureau to perform ex-ante control of large -value procurements 
and procurements selected on the basis of risk assessment and certain principles stipulated in the 
Law. 
The contracting authorities are obliged to publish a contract notice when they use the 
simplified open proce dure, the open procedure, the restricted procedure, the competitive dialogue, 
the competitive procedure with negotiation, the negotiated procedure with publication of a contract 
notice or the innovation partnership. The contract notice must be published bo th on the ESPP and in 
the Official Gazette. The low -value procurement procedure requires publication on the ESPP only. 
For procurement contracts of an estimated value exceeding certain thresholds, the contract notice 
must be published also in the Official Journal of the European Union or in a relevant business or 
specialized publication (e.g. Tenders Electronic Daily). The new LPP increases these thresholds to 
align them with EU procurement Directives (Table 3.16). The contents of the contract notice and th e 
tender documentation are stipulated in the Law, and are further regulated in the respective 
rulebooks.108  
Table 3.16 Thresholds for the publication of contract notices in the Official Journal of the 
European Union  
 Type of procuring entity  
Type of procurement  Classical sector  Utilities  
Supplies and services, and design contests          ≥ EUR 130,000        ≥ EUR 400,000  
Works       ≥ EUR 5,000,000  ≥ EUR 5,000,000  
Specific services          ≥ EUR 750,000  ≥ EUR 1,000,000  
Source:  New Law on Public Procurement.  
The minimum time -periods for the receipt of tenders and requests to participate vary, 
depending on the type of procurement procedure (and, in some cases, also on the type of contracting 
authority, i.e. whether from the classical or utilities sector). The new LPP reduced some of these 
time-periods; for example, in the open procedure, the minimum time -limit for the receipt of tenders 
is 30 days from the date on which the contract notice was published on the ESPP (previously, it was 
45 days). Time -periods may be reduced for reasons of urgency as prescribed by the Law.  
The contracting authority must verify i f any of the tenderers is on the list of "negative 
reference for professional misconduct" (blacklisting), available on the ESPP, and must exclude any 
tenders presented from economic operators with a negative reference. The new LPP limits the 
                                                
107 Article 54 of the new LPP.  
108 Rulebook on the Form and the Contents of Contract Notices and Contract Award Notices (Official 
Gazette No. 154/07) and Rulebook on th e Contents of Tender Documentation (Official Gazette Nos. 19/08 and 
162/14).  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 duration of th e exclusion to participate in public procurements to six months from the date of 
publication of the negative reference.  
The evaluation of tenders shall be conducted only by applying the criteria stated in the tender 
documentation and published in the cont ract notice. The new LPP introduced changes in the criteria 
for awarding contracts. The lowest price is no longer the default valuation method, as mandated in 
the previous version of the law. Instead, the new Law provides the possibility for quality to be 
evaluated in addition to price. Hence, to select the most advantageous tender, a contracting 
authority can determine whether to apply: (i) the lowest cost; (ii) the life -cycling costing approach; 
or (iii) the best price -to-quality ratio, as a contract awar d criterion. The latter may include 
qualitative, environmental and social aspects linked to the subject matter of the procurement.109   
The use of e -auctions is no longer mandatory. Experience has shown that, in some cases, 
the use of this procurement proced ure led to bid -rigging between tenderers and to increases in 
prices in the absence of real competition. In the new LPP, e -auctions are retained but only as an 
option.  
The contracting authority must notify the tenderers, in writing, of its decision to awar d the 
contract, within three days of the adoption of the decision, and to inform unsuccessful tenderers of 
the reasons why their tenders were rejected. The contracting authority must also publish a contract 
award notice on the ESPP within 10 days of the co nclusion of the relevant contract award procedure.  
The procurement regime does not provide for national preferences. The previous Law 
stipulated that, in the case of utilities, if, after applying the contract award criteria, two or more 
tenders were less than three points in range from each other, the contracting authority could select 
the tender where more than 50% of the supplies originated in North Macedonia, the EU member 
States, or countries that had concluded an international agreement providing reci procal treatment 
to North Macedonian economic operators in their respective markets.110 This provision was 
eliminated from the new LPP.  
There are no preferences margins for tenders submitted by small and medium enterprises 
(SMEs). However, under the previou s Law, contracting authorities were required to divide 
pharmaceutical contracts into lots, so as to facilitate the participation of SMEs in public procurement. 
Under the new LPP, contracting authorities are encouraged to use this practice across the board,  
and they must provide justification if they decide not to divide their contract into lots.111  
According to data collected by the Public Procurement Bureau, the number of public contracts 
awarded increased from 20,645 in 2013 to 27,031 in 2017, having reach ed a peak of 30,168 in 2016 
(Table 3.17). In terms of value, however, the amount awarded in 2017 was inferior to the annual 
values awarded in each of the four previous years, which the authorities attribute in part to the 
political instability witnessed by  the country in that year. As for the type of procurement procedures 
used, most contracts were awarded through open procedures, accounting on average for over 75% 
of all contracts awarded each year during the review period . The second most frequently used 
procedure was the simplified competitive procedure. In 2017, supplies accounted for 48% of the 
value of contracts awarded, services for 32%, and works for 20%.  
Table 3.17 Number and valuea of public contracts  awarded by type of procurement 
procedure, 2013 -2017  
Procedure  2013  2014  2015  2016  2017b 
No. 
contr.  Value   No. 
contr.  Value  No. 
contr.  Value  No. 
contr.  Value  No. 
contr.  Value  
Simplified 
competitive, 
up to 
EUR 5,000   7,364  1,233.3  7,321  1,199.8  8,327  1,199.8  8,855  1,165.6  7,957  1,032.3  
Simplified 
competitive, 
up to 
EUR 20,000  3,268  2,362.7  5,284  2,713.3  7,364  3,514.1  9,123  3,994.8  7,823  3,307.7  
Open  7,109  35,691.5  7,115  47,552.4  9,090  35,414.0  9,838  44,607.1  9,128  28,870.5  
                                                
109 Article 99 of the new LPP.  
110 Article 199 of the LPP.  
111 Article 78 of the new LPP.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 Procedure  2013  2014  2015  2016  2017b 
No. 
contr.  Value   No. 
contr.  Value  No. 
contr.  Value  No. 
contr.  Value  No. 
contr.  Value  
Restricted  7 1,209.1  3 826.0  2 2,449.1  1 1,880.2  0 0.0 
Negotiated, 
with 
publication  58 3,555.0  68 1,010.9  5 640.7  34 392.6  11 480.6  
Negotiated, 
without 
publication  1,452  5,936.3  826 3,466.5  969 1,802.3  608 2,283.3  497 1,796.5  
Qualification 
system  22 1,887.4  48 3,136.7  19 621.5  30 3,581.7  52 2,008.1  
Non-priority 
services  1,365  616.3  1,273  486.5  1,616  810.1  1,679  912.8  1,563  701.3  
Total 20,645  52,491.7  21,938  60,392.1  27,392  46,451.6  30,168  58,818.2  27,031  38,196.8  
a Value is in MKD million.  
b Data on 2017 is provisional.  
Source:  Information provided by the authorities.  
Table 3.18 shows that the value of the public contracts awarded to foreign suppliers 
decreased in both absolute and relative terms between 2013 and 2017. Except for 2014, the 
contracts awarded to foreign op erators represented less than 10% of the total value of contracts 
awarded in each year covered by this review.  
Table 3.18 Valuea of public contracts awarded to foreign economic operators, 2013 -2017  
 
2013  2014  2015  2016  2017b 
Value  % Value  % Value  % Value  % Value  % 
Total 
contracts 
awarded  52.49  100.00  60.39  100.00  46.45  100.00  58.81  100.00  38.19  100.00  
To foreign 
operators  4.43 8.43 7.18 11.88  3.56 7.66 2.78 4.72 0.95 2.48 
a Value is expressed in MKD billion.  
b Data for 2017 are provisional.  
Source:  Information provided by the authorities.  
Review procedures are governed by Title VIII of the new LPP (Chapter X of the LPP). Any 
national or foreign economic operator having a legal interest in the contract  award procedure, as 
well as the Public Procurement Bureau and the State Attorney's Office, may initiate a review 
procedure before the State Appeals Commission on Government Procurement (SAC).112 Appeals can 
be lodged with respect to decisions taken in the d ifferent phases of the procurement procedure. The 
time-limits for lodging an appeal vary according to the procurement procedure used. For example, 
in the open procedure, an appeal must be lodged within ten days of the date of the decision to be 
appealed (f ive days in the case of the simplified open procedure and the small -value procurement 
procedure). The lodging of an appeal suspends the signing of a public contract and its execution 
until a final decision is reached.113  
The SAC may take several measures to correct breaches of the law, including: stopping a 
procedure, repealing a decision or cancelling parts of the actions found illegal, annulling the decision 
and cancelling the whole procedure, and deciding upon compensat ion for procedural costs. It may 
also decide on the application of interim measures, and impose fines. Generally, the SAC must adopt 
a decision within 15 days of the date of submission of the documentation for the appeal. An 
administrative dispute against a decision of the SAC may be initiated before the Administrative Court 
within 30 days.  
Between 2013 and 2017, the SAC received a total of 3,069 appeals relating to government 
procurement procedures, and solved 2,975 cases (Table 3.19). Data for the period  under review 
shows a downward trend in the number of appeals lodged since 2015. On average, in 37% of the 
                                                
112 The SAC is also competent to resolve appeals in contract award procedures for concessions and  
public -private partnerships.  
113 However, the contracting authority may request the SAC to approve the continuation of the contract 
award procedure before the final decision is taken if disproportionate damage could be caused if the procedure 
was not conduc ted. WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 appeals solved each year, the SAC found the appeals to be founded; this percentage reached over 
40% in 2016 and 2017. Unfounded appeals accounted  for, on average, a third of all solved appeals 
during the period under review. In 2017, a total of 561 appeals were submitted to the SAC, and 548 
appeals were solved. In the same year, 86 lawsuits were filed at the Administrative Court against 
decisions adopt ed by the SAC.  
Table 3.19 Appeals lodged before the State Appeals Commission, 2013 -2017  
 2013  2014  2015  2016  2017  
Total number of appeals lodged  605 654 626 623 561 
Accepted appeals (i.e. founded)  178 190 238 271 235 
Unfounded appeals  263 327 269 221 206 
Rejected appeals (due to formal reasons)  83 71 61 44 57 
Appeals accepted by the contracting authoritya  20 26 25 42 27 
Withdrawn appeals (by the appellant)  29 24 17 28 23 
Solved appeals  573 638 610 606 548 
a In such cases, the contracting authority informs the SAC that it finds the appeal to be founded and 
will correct the alleged irregularities.  
Note The discrepancy between the number of lodged appeals and solved appeals comes from the fact that 
some appeals are lodged at the end of the year and are solved in the following year.  
Source:  Information provided by the authorities.  
In the past few years, assessments of North Macedonia's public procurement system by both 
domestic and international sources identified areas for further improvement, such as the need to: 
strengthen the administrative and oversight capacity of the PPB; increase the cooperation among 
government entities involved in aspects related to public procurement; improve transparency and 
strengthen internal auditing; devise tools to reduce the risk of corrupt practices; and reinforce 
investigation of irregularities related to public procurement.114 Some of these issues were addressed 
in the new LPP.  
3.3.8   Intellectual property rights  
North Macedon ia's legal framework on intellectual property rights (IPRs) is quite 
comprehensive and, as in other spheres, it has progressively been aligned with EU legislation. It 
includes, principally, the Law on Industrial Property115 and its regulations (covering pate nts, 
trademarks, industrial designs, appellations of origin, and geographical indications); the Law on 
Protection of Topographies of Integrated Circuits116; the Law on Copyright and Related Rights117; 
the Law on General Administrative Procedures118; the Law on C ustoms Measures for the Enforcement 
of Protection of IPRs119; and the Law on Breeders' Rights.120 While there were no fundamental 
changes to the IPR legal regime during the review period, there were two significant additions: the 
Law on Customs Measures for th e Enforcement of Protection of IPRs (based on EU Regulation No. 
608/2013), which stipulates the conditions and procedures for Customs to take action with respect 
to goods suspected of infringing IPRs, and the Rulebook on the form and content for the reques t by 
right-holders for Customs to take action and for extending the period of such action (based on 
EU Regulation No. 1352/2013).121  
                                                
114 Public Procurement Bureau Annual Report 2016; and European Commission, Commission Staff 
Working Document, The former Yugoslav Republic of Macedonia , SWD (2018),  154 final , Strasbourg, 2018, 
pp. 57-59. 
115 Official Gazette No. 21/09 and amendments publ ished in Official Gazette Nos. 24/11, 12/14, 41/14, 
152/15, 53/16, and 83/18.  
116 Official Gazette No. 06/98 and amendments in Official Gazette Nos. 33/06, and 136/11.  
117 Official Gazette No. 115/10 and amendments in Official Gazette Nos. 140/10, 51/11, 147/1 3, 
154/15, and 27/16.  
118 Official Gazette No. 124/15.  
119 Official Gazette Nos. 88/15, 154/15, 192/15, and 23/16.  
120 Official Gazette No. 104/11.  
121 Official Gazette No. 106/15.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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The TRIPs Council of the WTO reviewed the intellectual property (IP) legislation of North 
Macedonia in 2004.122 The country ac cepted the Protocol Amending the TRIPS Agreement on 
16 March 2010.123 
North Macedonia is a member of the World Intellectual Property Organization (WIPO) since 
1993, and a signatory to numerous WIPO -administered treaties and other IP -related treaties 
(Table  3.20). The country is also a member of the European Patent Organization, and takes part in 
the European Patent Convention.  
Table 3.20 Selected WIPO and IP -related treaties in force in North Macedonia, 2019  
Treaty  Entry into force  
Paris Convention for the Protection of Industrial Property  8 September 1991  
Berne Convention for the Protection of Literary and Artistic Works  8 September 1991  
Madrid Agreement Concerning the International Registration of Marks  8 September 1991  
Nice Agreement Concerning the International Classification of Goods and Services for 
the Purposes of the Registration of Marks  8 September 1991  
Locarno Agreement Establishing an International Classification for Industrial Designs  8 September 1991  
Convention Establishing the World Intellectual Property Organization  8 September 1991  
Brussels Convention Relating to the Distribution of Programme -Carrying Signals 
Transmitted by Satellite  17 November 1991  
Patent Cooperation Treaty  10 August 1995  
Hague Agreement Concerning the International Registration of Industrial Designs  18 March 1997  
Rome Convention for the Protection of Performers, Producers of Phonograms and 
Broadcasting Organizations  2 March 1998  
Convention for the Protection of Producers of Phonograms Against Unauthorized 
Duplication of their Phonograms  2 March 1998  
Protocol Relating to the Madrid Agreement Concerning the International Registration of 
Marks  30 August 2002  
Budapest Treaty on the International Recognition of t he Deposit of Microorganisms for 
the Purposes of Patent Procedure  30 August 2002  
Strasbourg Agreement Concerning the International Patent Classification  30 May 2003  
WIPO Copyright Treaty  4 February 2004  
WIPO Performance and Phonograms Treaty  20 March 2005 
Patent Law Treaty  22 April 2010  
Vienna Agreement Establishing an International Classification of the Figurative 
Elements of Marks  26 May 2010  
Singapore Treaty on the Law of Trademarks  6 October 2010  
Lisbon Agreement for the Protection of Appellati ons of Origin and their International 
Registration  6 October 2010  
International Convention for the Protection of New Varieties of Plants (UPOV)  4 May 2011  
Optional Protocol to the Convention on the Rights of Persons with Disabilities  28 January 2012  
Nairobi Treaty on the Protection of the Olympic Symbol  27 June 2014  
Source:  WIPO online information. Viewed at: https://wipolex.wipo.int/en/legislation/profile/MK . 
Several institutions ar e involved in the implementation and enforcement of IP legislation in 
North Macedonia. They include the following124: 
• State Office of Industrial Property (SOIP): is responsible for formulating and implementing 
industrial property rights, i.e. patents, tradem arks, industrial designs, topographies of 
integrated circuits, appellations of origin, and geographical indications;  
• Copyright Unit within the Ministry of Culture: administers the protection of copyright and 
other related rights, including the supervision of collective management organizations;  
• State Market Inspectorate: is responsible for monitoring markets and preventing the sale of 
pirated and counterfeit goods;  
                                                
122 WTO document IP/Q/MKD/1, 3 June 2005.  
123 WTO document WT/Let/671, 19 March 2010.  
124 Other institutions involved in policy formulation, promotion or implementation of IPRs include: the 
Ministry of Justice, the Academy of Judges and Public Prosecutors, the Public Prosecutor's Office, the Supreme 
Court, the Administrative Court, the Fund fo r Innovation and Technology Development, the Ministry of 
Education and Science, universities, the Association of Intellectual Property Agents, and industry and trade 
chambers. The National Strategy on Industrial Property 2016 -2018 spells out their respecti ve functions.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 • Customs Administration: is empowered to investigate cases of counterfeit goods and pre -
emptiv ely seize suspect goods. It can act ex officio  or after receiving a formal request from 
the right -owner;  
• Ministry of Economy: approves the policies and programmes for the promotion and 
protection of IPRs, and for improving competitiveness and innovation of  Macedonian 
enterprises; monitors the implementation of the National Strategy on IP;  
• Ministry of the Interior: has the authority to prevent the violation of copyright on the market, 
and is responsible for dealing with IPR -related crimes in the digital envi ronment;  
• Directorate for Seeds and Seedling Materials under the Ministry of Agriculture, Forestry and 
Water Management: is in charge of the protection of new plant varieties and geographical 
indications on agricultural products;  
• Coordination Body for Intel lectual Property: provides a coordinated approach to IP policy 
and enforcement; organizes inter -agency raids to seize counterfeit goods; and conducts 
campaigns to raise public awareness on the benefits of protecting IPRs.  
The Law on Industrial Property an d its by -laws regulate the acquisition, exercise and 
protection of patents, industrial designs, trademarks, appellations of origin, and geographical 
indications.125 It includes dedicated provisions on security and provisional measures, judicial 
protection, a dditional protection for well -known marks, compulsory licensing, and parallel imports.126 
It also incorporates the MFN, national treatment and transparency principles.  
Trademark protection requires formal registration with the Registry of Trademarks, managed  
by the SOIP. Domestic and foreign individuals and legal entities may register rights, but foreigners 
must be represented by an authorized representative registered with the SOIP. Registration of 
foreign trademarks is done through filing either a domestic application with the SOIP or an 
international application through WIPO's Madrid Agreement. In 2018, the total number of trademark 
applications was 8,367, of which 7,524 were for foreign trademarks (Table 3.21). It is worth noting 
that the number of tradema rks granted in the years 2016 to 2018 was significantly higher than in 
the period 2013 -2015.  
Table 3.21 Trademark statistics, 2013 -2018  
Year Domestic  Foreign applications  Total by 
Madrid 
Agreement
/Protocol  Total 
foreign  Total  Granted  
To 
SOIP  By Madrid Agreement/Protocol  
New Subsequent  
designations  Cont.  
of 
effect  
 1 2 3 4 5 6=3+4+5  7=6+2  8=7+1  9 
2013  739 514 2,797 560 0 3,357 3,871 4,610  840 
2014  851 587 2,364 666 0 3,030  3,617  4,468  840 
2015  815 539 2,757  431 0 3,188  3,727  4,542  614 
2016  782 487 2,853  468 4,028  7,349  7,836  8,618  1,112  
2017  780 488 2,619  432 3,923  6,974  7,462  8,242  1,777  
2018  843 474 2,570  438 4,052  7,050  7,524  8,367  1,511  
Source:  Information provided by the authorities.  
Pursuant to the Law on Industrial Property, the owner of a registered mark has the exclusive 
right to prevent third parties from using identical or similar signs for the same or similar goods or 
services, if such u se would likely result in confusion. Trademarks are protected for a period of ten 
                                                
125 Regulation for Patents (Official Gazette No. 92/09), Regulation for Industrial Designs (Official Gazette 
No. 92/09), Regulation for Trademarks (Official Gazette Nos. 92/09 and 177/18), and Regulation for 
Appellations of Origin and Geographi cal Indications (Official Gazette No. 18/04).  
126 Compulsory licensing is regulated in Articles 97 -115, and parallel imports in Articles 171 and 209.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 years, which can be renewed indefinitely. Trademark owners must use their trademarks to maintain 
their validity.  
Patents are registered with the SOIP in accordance with the procedure stipulated in the Law 
on Industrial Property. Foreign applications for patent protection may be submitted through WIPO's 
Patent Cooperation Treaty, the European Patent Office (EPO) (for extensions) or the SOIP. In 2018, 
2,120 foreign patent appli cations were received, compared to 32 domestic applications (Table 3.22).  
Patents may be granted for inventions in all technology fields, provided they are: new, 
involve an inventive step, and are susceptible of industrial application. A patent has a vali dity of 20 
years and may be extended. However, this extension cannot be for a period of more than five years 
if the subject matter of the patent is a medical product, a product for plant protection or a process 
through which these are produced, for which, prior to placing it on the market, an administrative 
procedure of authorization, prescribed by law, must be conducted.127  
Table 3.22 Patent statistics, 2013 -2018  
Year Domestic  Foreign applications, national phase  
Total SOIPc Decision s 
granted  PCTa ЕPOb 
extension  SOIPc 
1 2 3 4 5=1+4  6 
2013  42 4 495 499 541 378 
2014  29 0 544 544 573 116 
2015  31 1 687 688 719 884 
2016  49 7 887 894 943 678 
2017  52 3 948 951 1,003 938 
2018  32 2 1,058  1,060  1,092  1,277  
a Patent Cooperation Treaty.  
b European Patent Office.  
c State Office of Industrial Property.  
Source:  Information provided by the authorities.  
During the period under review, the Government adopted the National Strategy on Industrial 
Property 2016 -2018. Its overall aims are to guarantee a level of IPR protection similar to that of the 
European Union, to permanently harmonize it with all internati onal obligations and agreements 
concluded by North Macedonia in this field, and to help develop an efficient IP system as a backbone 
for economic growth. The Strategy's specific objectives are: to improve the industrial property 
legislative framework; to s trengthen IPR enforcement; to develop right -holders' capacity to protect 
IPR; and to increase public awareness of the benefits of IPR protection.128 Given that the Strategy 
was only adopted in October 2017, the period of implementation of the Strategy's Acti on Plan was 
extended until end -2019. The activities carried out so far include staff training, an analysis of the 
services offered by the SOIP, and a national campaign to raise the awareness of SMEs and the public 
at large of the need to protect and enforc e IPRs.  
The SOIP is engaged in technical cooperation activities at regional and international levels, 
notably with the EPO and WIPO. Under a bilateral cooperation agreement with the EPO for 2013 -
2015, several activities were carried out, such as the search  and examination of European patent 
applications, the implementation of a new domestic patent register, and the development of an 
online filing system of patent applications, which is still in process. A new cooperation agreement 
with the EPO was concluded  for the period 2016 -2018. Cooperation schemes with individual 
European patent agencies are also in place, such as the Twinning project with the Danish Patent 
Office, which focuses on strengthening the capacities of the SOIP and the Customs Administration 
to enforce IPRs.  
The Law on Copyright and Related Rights (2010) regulates the rights of authors, artists, 
performers, phonogram producers, video/film producers, broadcasting organizations, publishers, 
and database developers. Computer programs are protect ed as copyright works. Copyrights are not 
registered. The Ministry of Culture is in charge of administering the protection of copyrights and 
related rights. Equal protection is granted to domestic and foreign holders of copyright and related 
                                                
127 Article 74 of the Law on Industrial Property, Official Gazette No. 21/2009.  
128 The National Strategy was ad opted on 10 October 2017. Viewed at: 
http://ippo.gov.mk/docs/xFiles/xfile/1020/db160552 -cbba-4ea0-a2ea-61be2f750290.pdf . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 rights. Econom ic rights are valid during the author's lifetime and for 70 years after his/her death, 
unless otherwise provided under the Law. An author's moral right to withdraw his/her work is valid 
during the author's lifetime; other moral rights are perpetual. The br each of copyright is considered 
a criminal offence and, under certain circumstances, a misdemeanour, and it is subject to 
administrative, civil and criminal remedies.  
The Law on Copyright and Related Rights was amended in 2016 to regulate the functioning 
of the collective management of rights and fee distribution, and to eliminate a cap on right -holders' 
remuneration. Also, recently, the Minister of Culture adopted a Decision to grant a licence for the 
collective management of rights of audiovisual works t o the Association for the Protection of 
Copyrights and Related Rights "AZAS", Skopje.129 The small Copyright Unit within the Ministry of 
Culture would benefit from the adoption of measures to strengthen its capacity, and resources to 
administer the copyright  system.  
Under the 2015 Law on Customs Measures for the Enforcement of Protection of IPRs, 
customs officers have the authority to order the temporary seizure of goods if, during a customs 
procedure, there is a grounded suspicion that those goods infringe a n IPR. Temporarily -seized goods 
may be ordered for destruction if the right -holder confirms that they infringe an IPR, or they can be 
released for free circulation where there is no infringement.  
Right-holders, national or foreign, are entitled to request  the customs authority to take 
action against goods suspected of IPR infringement. The Department for Non -Tariff Measures and 
Protection of Intellectual Property within the Customs Administration is responsible for receiving and 
acting upon such requests. Between 2013 and 2018, said Department received 1,001 requests for 
customs action related to trademarks (991 as at end -September 2018). During the same period, 
the Customs Administration undertook 702 actions, temporarily seizing 272,830 units, about which  
there was a reasonable suspicion of IPR infringement (87,947 in the period January -September 
2018). The main types of goods seized were: cosmetic products (35%), textiles and clothing (23%), 
footwear (16%), and other products (26%). The total declared val ued of the seized goods was about 
MKD 25.5  million (an estimated MKD 258.5 million, had the goods been released and sold on the 
domestic market as original goods). Upon confirmation of IPR infringement by the right -holders, 
1,203,384 pieces of counterfeit goods were destroyed (3,254 pieces between January and 
September 2018).130 Penalties for IPR infringement include from 30 to 60 days closure of businesses, 
monetary fines of up to EUR 5,000, or prison of up to five years.  
Although North Macedonia has a soun d legal framework for the protection of IPRs, the 
enforcement of these rights through the court system remains a challenge, since there are no 
specialized courts to handle IPR cases, and prosecutors and judges lack adequate experience.131 
Another challenge i s the absence of reliable statistics, which  makes it difficult to measure the extent 
of IPR infringements.132 A methodology for collecting and processing data on IPR infringements was 
developed and is in the process of being improved; however, no data has be en published yet. There 
is also a project for developing an e -network, where a module for collecting and processing data 
pursuant to the methodology is envisaged. It is expected that this will ease the collection and 
publication of data from the national i nstitutions that participate in IPR enforcement. Other areas 
where there seems to be room for improvement are the coordination of IPR enforcement bodies, 
and the need to increase public awareness of the importance of IPR protection. The International 
Prope rty Rights Index (IPRI) ranked North Macedonia 68th (out of 125) for its Intellectual Property 
Protection score in 2017, compared to 61st in 2013 (there was insufficient data to update the 
country's ranking for the 2018 IPRI).133 
 
                                                
129 Official Gazette No. 203/2018, 8 November 2018.  
130 Data in this paragraph were provided by the authorities.  
131 Courts with jurisdiction in IPR -related cases are the basic courts of first instance, the courts of 
appeal, and the Supreme Court.  
132 European Commission, Commission Staff Working Document, The former Yugoslav Republic of 
Macedonia, SWD (2018), 154 final,  Strasbourg, 17 April 2018, p. 60. Viewed at: 
https://ec.europa.eu/neighbourhood -enlargement/sites/near/files/20180417 -the-former -yugoslav -republic -of-
macedonia -report.pdf . 
133 The Property Rights Alliance, 2017 International Property Rights Index . Viewed at: 
https://www.internationalpropertyrightsindex.org/country/macedonia . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 4  TRADE POLICIES BY SE CTOR  
4.1  Agriculture, Forestry, and Fisheries  
4.1.1   Features and market development  
Agriculture remains an important activity for North Macedonia's economy. Its share (including 
forestry and fisheries) in total employment declined in recent years, as has its share in GDP 
(Table  4.1). In 2018, the sector accounted for 8.4% of GDP and for 15.7% of employment.  
Table 4.1 Gross value added (GVA) and employment in the agriculture, forestry, hunting 
and fishery sector, 2010 -18 
  2010  2011  2012  2013  2014  2015  2016  2017  2018  
GVA (at current prices, 
million euro)  718.9  705.9  690.6  817.0  871.6  882.7  885.0  789.5  777.4  
     Share in GVA of all 
activities (%)  11.7  10.9  10.5  11.5  11.7  11.1  10.6  9.1  8.4  
Share in total 
employment (%)  19.1 18.7 17.3 18.7 18.5 17.9 16.6 16.2 15.7 
Source:  State Statistical Office, MakStat database. Viewed at: 
http://www.stat.gov.mk/PoslednoObjavenoVoMakstat_en.aspx . 
Agricu lture's contribution  to the econ omy is even higher w hen com bined with the agricultural 
processing industry (including beverages and tobacco), wh ich accounts for an additional 3% of GDP , 
and 2 % to 3% of employment , depending on the year. As most of the territory is hilly and/o r 
mountainous, with an average elevation of 850 metres above sea level, a substantial part of the 
land is dedicated to agro -pastoral and forestry activities. Intensive agriculture is concentrated in the 
ten main valleys.  
Throughout this Section, agricultural products are defined according to Annex 1 of the WTO 
Agreement on Agriculture. Table 4.2 gives the area devoted to the main crops, their production and 
yield, from 2010 to 2017. Table 4.3 gives information on the lives tock herds for the same years.  
Table 4.2 Crops: area, production and yield, 2010 -17 
  2010  2011  2012  2013  2014  2015  2016  2017  
I - AREA OF PRODUCTION  ('000 ha)  
Total grain s  163.4  161.3  161.0 166.4  161.0 159.4  165.4  159.4  
of which:          
- wheat  80.0 79.0 79.7 81.8 76.9 74.0 79.9 73.0 
- maize  28.7 29.4 29.2 31.0 30.5 31.8 31.1 31.4 
Oilseeds  4.1 5.7 3.8 2.5 5.1 5.6 4.0 4.1 
Potatoes  13.4 13.8 13.2 13.5 13.2 13.4 13.3 13.2 
Grapes (total)  20.0 20.0 20.0 21.1 22.7 22.9 23.2 23.4 
Fruit (total orchards)  14.0 14.0 15.0 14.0 15.0 16.0     
Vegetables (total)  32.1 31.4 31.5 32.1 32.9 33.0 32.7 32.6 
Other:                  
- Tobacco  20.3 19.7 19.6 19.2 17.8 16.1 16.4 16.0 
- Beans  13.3 13.6 13.8 13.5 13.6 13.6 13.6 13.2 
- Fodder  27.5 27.2 26.9 27.8 29.1 30.1 31.5 31.9 
II – PRODUCTION  ('000 t)  
Total grain s  538.5  551.6  456.8  557.6  625.9  480.6  637.8  444.9  
 of which:          
- wheat  243.1  256.1  215.0 259.0 288.0 201.2  306.4  200.1  
- maize  129.0 126.1  115.9  131.0 136.9  133.8  143.8  120.2  
Oilseeds  7.6 8.5 4.8 3.8 9.3 8.5 6.3 6.2 
Potatoes  200.1  192.7  168.9  189.6  198.9  189.4  197.1  177.7  
Grapes (total)  253.4  235.1  277.4  292.1  195.9  324.8  333.3  180.3  
Fruit (total)  199.7  200.6  203.6  196.5  171.8  225.5  177.6  93.7 
Vegetables (total)  722.3  655.6  655.2  662.9  752.4  820.8  784.0 747.9  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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   2010  2011  2012  2013  2014  2015  2016  2017  
Other:                  
- Tobacco  30.3 26.5 28.6 27.9 27.6 24.2 25.4 22.9 
- Beans  14.2 13.0 11.0 11.4 13.4 13.4 13.0 10.0 
- Fodder  210.5  201.6  178.5  196.6  245.9  253.9  330.0 257.8  
III - AVERAGE YIELD  (t/ha)  
Wheat  3.0 3.2 2.7 3.2 3.7 2.7 3.8 2.7 
Maize  4.5 4.3 4.0 4.2 4.5 4.2 4.6 3.8 
Potatoes  14.9 14.0 12.8 14.1 15.1 14.2 14.9 13.5 
Grapes  12.7 11.8 13.9 13.8 8.6 14.2 14.4 7.7 
Source:  State Statistical  Office, Statistical Yearbooks.  
The overall area de dicated to grain  production and the volume of that production 
declin ed.1.Tobacco, a major local product, also saw its area and production decline. The area and 
production of fodder and more labour -intensive products, such as vegetables, increased notably. 
Those of grapes and fruit also increased greatly. However, extreme weather conditions saw a 
downturn for grapes in 2017, and for fruit in 2016 and 2017 (Table 4.2).  
Livestock products are un dergoing a similar evolution, with the total number of cattle declining 
and the number of milk cows and pigs increasing (Table 4.3).  
Table 4.3 Livestock: herd size, 2010 -17 
('000)  
  2010  2011  2012  2013  2014  2015  2016  2017  
Cattle  260 265 251 238 242 253 255 255 
 of which  cows and 
heifers in calf  135 165 161 154 155 157 161 154 
of which  milk cows  119 133 123 129 127 128 132 137 
Pigs 191 197 177 167 165 195 203 202 
 of which  breeding sows  28 24 24 24 21 19 25 24 
Sheep and goats  778 767 732 732 740 734 723 725 
 of which breeding 
ewes/goats  568 545 521 531 531 581 556   
Horses  27 25 22 21 19 19 19 18 
Poultry  1,995  1,944  1,776  2,202  1,940  1,761  1,866 1,840 
Beehives  76 65 53 68 74 74 81 75 
Source:  State Statistical Office.  
Table 4.4 Value of production, 2012 -16 
(EUR million)  
  2012  2013  2014  2015  2016  
Cereals   103.5  125.1  129.0  94.3 103.3  
Industrial crops  83.4 81.8 82.6 72.2 75.0 
Forage plants  65.5 82.4 84.8 93.7 106.7  
Vegetables  418.9  418.0  463.7  470.4  446.3  
Potatoes  31.8 59.2 54.8 44.4 40.9 
Fruit 131.7  139.1  114.9  151.4  148.3  
Wine 38.1 51.0 43.9 64.3 50.6 
Total c rop output  872.9  956.5  973.7  990.7  971.1  
Animals  134.8  131.7  123.7  136.7  137.2  
Animal products  158.3  169.3  175.9  170.7  183.9  
Total a nimal output  293.1  301.0  299.6  307.4  321.1  
Total a gricultural goods output  1,166.0  1,257.5  1,273.4  1,298.1  1,292.2  
Source:  Information provided by the authorities.  
The value of production in creased between 2012 and 2016 in many categories of agricultural 
goods output (Table 4.4). The majority of farms are small family farms, with an average size of 
1.85 ha in 2015; and they are fragmented, with an average of five non -contiguous parcels. There  
are a large number of small subsistence farms; it is reported that many agricultural livestock farms 
                                                
1 The wheat area decreased, while the area of maize increased.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 and food processing facilities do not yet meet relevant EU standards .2 The sector also faces many 
other challenges, including an ageing, declining and rel atively unskilled labour force, low use of 
agricultural machinery, a lack of commercial financing and investment, a lack of cooperatives and 
collective structures, and a low level of innovation and technology transfer due to high costs of 
research and limi ted market opportunities. As explained below, the national agricultural strategy 
and the EU Pre -Accession Assistance for Rural Development (IPARD) programme are targeted at 
tackling these impediments.  
North Macedonia exhibits a structural and growing trade  deficit for agri -food products 
(Table  4.5). The share of agri -food exports in total exports declined significantly, and the share of 
agri-food imports in total imports also declined, but at a slower pace.  
Table 4.5 Trade in agricultural products, 2010 -18 
(EUR million)  
  2010  2011  2012  2013  2014  2015  2016  2017  2018  
Agricultural exports  416.1  461.1  473.5  499.5  483.0  485.8  530.7  534.1  541.3  
% of total exports  16.4 14.3 15.2 15.4 12.9 11.9 12.1 10.6 9.2 
Agricultural imports  516.2  601.4  661.0  636.9  629.9  680.7  699.5  740.1  768.5  
% of total imports  12.5 11.9 13.0 12.8 11.4 11.7 11.3 10.8 10.0 
Trade balance  -100.1  -140.2  -187.5  -137.4  -146.9  -194.9  -168.8  -206.0  -227.3  
Export/import ratio 80.6 76.7 71.6 78.4 76.7 71.4 75.9 72.2 70.4 
Note:  WTO definition of agriculture: HS Chapters 01 -24 less fish and fishery products (HS Chapter 3, 
0508, 0511.91, 1504.10, 1504.20, 1603 -1605 and 2301.20)  plus some selected products (HS 
2905.43, 2905.44, 2905.45, 3301, 3501 -3505, 3809.10, 3823, 3824.60, 4101 -4103, 4301, 5001 -
5003, 5101 -5103, 5201 -5203, 5301, and 5302).  
Source:  State Statistical Office , MakStat Database. Viewed at: 
http://www.stat.gov.mk/PoslednoObjavenoVoMakstat_en.aspx . 
In 201 8, the main agricultural export s at the HS two -digit level were tobacco (2 3.7%, mostly 
unmanufactured ), preparations of cereals, flour, starch or milk  (12.8%, of which bread, pastry, 
cakes, biscuits and other bakers' wares 11. 3%), beverages (1 2.3%), edible vegetables and certain 
roots and tubers (1 0.3%), and p reparations of vegetables, fruit s, nuts or other parts of plants ( 9.2%) 
(Table 4.6) . The relative shares of th ese pro ducts in total  agricultural ex ports all increased comp ared 
to 2010 , except for edible vegetables . 
Table 4.6 Agricultural exports by products (HS code), 2010, 2012, 2014, and 2016 -18 
(EUR million)  
Product description  
(at the HS2 - and 4 -digit level s) 2010  2012  2014  2016  2017  2018  Share 
in 
2010 
(%) Share 
in 
2018 
(%) 
Total agricultural exports  416.1  473.5  483.0  530.7  534.1  541.3    
  % of total exports    16.4    15.2    12.9    12.1    10.6      9.2    
HS 24 Tobacco and manufactured 
tobacco substitutes  93.5 114.5  109.5  118.6  139.2  128.4  22.5 23.7 
     HS 2401 Unmanufactured 
 tobacco; tobacco refuse  72.3 95.1 95.7 106.9  124.2  117.3  17.4 21.7 
HS 19 Preparations of cereals, flour, 
starch or milk  33.6 40.0 52.6 61.9 66.2 69.5 8.1 12.8 
     HS 1905 Bread, pastry, cakes, 
biscuits and other bakers' wares  31.8 37.0 46.7 55.2 59.1 61.1 7.6 11.3 
HS 22 Beverages, spirits and vinegar  60.6 71.4 59.1 59.7 59.3 66.3 14.6 12.3 
     HS 2204 Wine of fresh grapes  38.5 56.1 48.3 47.9 46.4 51.0 9.3 9.4 
HS 07 Edible vegetables and certain 
roots and tubers  66.2 51.3 69.1 68.6 60.0 55.7 15.9 10.3 
HS 20 Preparations of vegetables, 
fruits, nuts or other parts of plants  31.7 34.8 42.1 47.0 47.6 49.6 7.6 9.2 
     HS 2005 Other vegetables , 
 prepared or preserved  13.3 16.4 20.3 24.2 26.1 27.9 3.2 5.1 
HS 08 Edible fruit and nuts; peel of 
citrus fruit or melons  39.6 50.7 47.3 56.3 42.6 40.6 9.5 7.5 
                                                
2 EU Instrument for Pre -Accessio n (IPA) Rural Development Program, 2014 -2020 (final) , 
December  2014, pp. 42 and 48. Viewed at: http://www.sep.gov.mk/data/file/IPA -2014-
2020/IPARD%20Progra mmeMK_13022015_final.pdf . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 Product description  
(at the HS2 - and 4 -digit level s) 2010  2012  2014  2016  2017  2018  Share 
in 
2010 
(%) Share 
in 
2018 
(%) 
HS 21 Miscellaneous edible 
preparations  13.5 15.5 17.3 20.8 22.8 26.2 3.2 4.8 
HS 06 Live trees and other plants  2.7 4.0 4.4 12.1 14.7 15.8 0.6 2.9 
HS 16 Preparations of meat, of fish 
or of crustaceans  10.8 13.4 13.1 9.9 11.0 14.6 2.6 2.7 
HS 18 Cocoa and cocoa preparations  8.4 8.1 8.9 10.0 10.8 11.4 2.0 2.1 
     HS 1806 Chocolate and other 
food preparations containing 
cocoa  6.9 7.3 8.6 9.7 10.5 11.0 1.7 2.0 
Top 10 at HS 2 -digit level  360.4  403.7  423.4  465.0  474.2  478.1    
     % of total agricultural exportsa 86.6 85.3 87.7 87.6 88.8 88.3   
a According to 2018 data at the HS 2 -digit level.  
Note:  WTO definition of agriculture: HS Chapters 01 -24 less fish and fishery products (HS Chapter 3, 
0508, 0511.91, 1504.10, 1504.20, 1603 -1605 and 2301.20)  plus some selected products (HS 
2905.43, 2905.44, 2905.45, 3301 , 3501 -3505, 3809.10, 3823, 3824.60, 4101 -4103, 4301, 5001 -
5003, 5101 -5103, 5201 -5203, 5301, and 5302).  
Source:  State Statistical Office, MakStat Database. Viewed at: 
http://www.stat.gov.mk/PoslednoObjavenoVoMakstat_en.aspx . 
The main import products in 201 8 were meat (14.6%, of wh ich poultry  6.0% and swine 3. 8%), 
miscellaneous edible preparations (9. 7%), dairy products (7.0%), animal or vegetable fats and oils 
and their  products  (6.6%), and preparations of cereals, flour, starch or milk; pastry cooks' products  
(6.7%) (Table 4.7).   
Table 4.7 Agricultural imports by product (HS code), 2010, 2012, 2014, and 2016 -18 
(EUR million ) 
Product description  
(at the HS2 - and 4 -digit level s) 2010  2012  2014  2016  2017  2018  Share  
in 
2010 
(%) Share 
in 
2018 
(%) 
Total agricultural imports  516.2  661.0  629.9  699.5  740.1  768.5    
     % of total imports   12.5   13.0   11.4   11.3   10.8   10.0    
HS 02 Meat and edible meat offal  80.1 105.9  98.5 94.7 107.0  112.2  15.5 14.6 
     HS 0207 Meat and edible offal, of 
poultry, fresh, chilled or frozen  30.9 47.2 45.9 40.3 47.9 45.8 6.0 6.0 
HS 0203 Meat of swine, fresh, chilled 
or frozen  20.9 26.2 23.7 23.4 26.5 28.9 4.1 3.8 
HS 21 Miscellaneous edible preparations  46.4 54.2 54.6 61.9 67.6 74.6 9.0 9.7 
HS 2106 Food preparations not 
elsewhere specified or included  27.0 29.1 31.1 35.1 38.8 43.3 5.2 5.6 
HS 04 Dairy produc ts 29.0 37.8 38.9 41.8 45.9 53.9 5.6 7.0 
     HS 0406 Cheese and curd  8.8 10.2 12.9 15.7 18.5 20.5 1.7 2.7 
HS 19 Preparations of cereals, flour, 
starch or milk; pastry cooks' products  32.5 33.8 39.1 44.5 47.1 51.6 6.3 6.7 
     HS 1905 Bread, pastry, cakes, 
biscuits and other bakers' wares  20.8 20.2 24.7 28.5 30.5 33.8 4.0 4.4 
HS 15 Animal or vegetable fats and oils 
and their products  43.8 66.6 47.8 59.1 50.2 50.9 8.5 6.6 
     HS 1512 Sunflower -seed, safflower or 
cotton -seed oil and fractions thereof  28.1 43.5 27.9 39.6 27.8 28.1 5.4 3.7 
HS 18 Cocoa and cocoa preparations  30.6 31.7 33.9 40.8 42.2 44.8 5.9 5.8 
HS 1806 Chocolate and other food 
preparations containing cocoa  24.5 25.7 28.0 33.4 34.6 37.2 4.7 4.8 
HS 08 Edible fruit and nuts; peel of citrus 
fruit or melons  24.4 28.2 34.9 40.4 42.2 43.6 4.7 5.7 
HS 22 Beverages, spirits and vinegar  25.5 29.7 29.0 35.3 38.3 42.0 4.9 5.5 
     HS 2202 Waters  13.8 16.8 16.3 19.3 20.6 22.2 2.7 2.9 WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 Product description  
(at the HS2 - and 4 -digit level s) 2010  2012  2014  2016  2017  2018  Share  
in 
2010 
(%) Share 
in 
2018 
(%) 
HS 24 Tobacco and manufactured 
tobacco substitutes  18.6 28.5 26.0 38.5 37.6 40.8 3.6 5.3 
HS 17 Sugars and sugar confectionery  45.3 49.9 36.7 44.0 45.7 37.1 8.8 4.8 
     HS 1701 Cane or beet sugar  37.0 39.8 26.7 33.6 33.8 25.4 7.2 3.3 
Top 10 at HS 2 -digit levela 376.2  466.4  439.3  501.1  524.2  551.6    
     % of total agricultural imports  72.9 70.6 69.7 71.6 70.8 71.8   
a According to 2018 data at the HS 2 -digit level.  
Note:  WTO definition of agriculture: HS Chapters 01 -24 less fish and  fishery products (HS Chapter 3, 
0508, 0511.91, 1504.10, 1504.20, 1603 -1605, and 2301.20)  plus some selected products (HS 
2905.43, 2905.44, 2905.45, 3301, 3501 -3505, 3809.10, 3823, 3824.60, 4101 -4103, 4301, 5001 -
5003, 5101 -5103, 5201 -5203, 5301, and 5302).  
Source:  State Statistical Office, MakStat Database. Viewed at: 
http://www.stat.gov.mk/PoslednoObjavenoVoMakstat_en.aspx . 
The main markets for agriculture and food products are the E uropean Union and neighbouring 
Western Balkan economies (Chart 4.1).  
Chart 4.1 Agricultural trade by main partners, 2010 and 2018  
 
Source:  WTO calculations, based on the State Statistical Office's M akStat Database. Viewed at: 
http://www.stat.gov.mk/PoslednoObjavenoVoMakstat_en.aspx . 
4.1.2   Policy objectives  and administration  
The Ministry of Agriculture, Forestry and Water Economy is the com petent authority for 
planning, monitoring and evaluatin g agricultural policy measures and instruments, while the Agency 
for Financial Support in Agriculture and Rural Development (AFSARD) is responsible for the 
implementation of agricultural policy measure s. The Food and Veterinary A gency is responsible for 
coordinatin g legislation and the control systems for food -safety issues, animal feed, and veterinary 
policy , and harmonization  with the E uropean Union on these issues.  The Ministry of Economy is 
responsible for related policies and programmes on economic policy, industrial policy, SME 
competitiveness , and innovation enhancement for the food processing industry.  The national 
extension agency, the State Finance Advisory Se rvices, will be reformed by a new law to be adopted 
in 2019.The reform will align the procedures of the agency with the objectives of the new agricultural 
0100200300400500600700800900
 2010  20180100200300400500600
 2010  2018Chart 4. [Macedonia] Agricultural trade by main partners
(EUR million)
OtherExports
EU-28Imports
Western Balkan economies
Serbia
Other Balkan economiesBrazil
TurkeyRussian Federation
United StatesOther(EUR million)
WTO calculations, based on State Statistical Office's MAKStat Database. 
Viewed at: http://www.stat.gov.mk/PoslednoObjavenoVoMakstat_en.aspx.Source:WT/TPR/S/ 390 • The Republic of North Macedonia  
 
- 80 - 
 
 strategy (see below), and will considerably widen the number of beneficiaries (from 700 to 30,000 -
40,000) through recourse to both recognized private advisers and co -financing by the EU -funded 
IPARD programme.  
The main  legal framework of agricultural  policy  is the Law on Agriculture and Ru ral 
Development , 20103, which did not undergo any significant chan ges during the period under review, 
in spite of several amendments.  Further legal and policy reforms are planned after the opening of 
accession to European Union,  to further align the North Macedonian agricultural policy with the EU 
common agricultural pol icy. Other significant laws adopted or amended during the period under 
review include the Law on the Establishment of Agency for Financial Support of Agriculture and Rural 
Development4, the Law on Quality of Agricultural Products5, the Law on Organic Agric ultural 
Production6, and the Law on Wine.7  
The main priorities of agricultural policy are defined by the National Strategy for Agriculture 
and Rural Development for the period 2014 -20 (NSARD 2014 -20). Its strategic objective is to 
increase the competitive ness of the North Macedonian  agricultural production and the food industry, 
the development of rural areas and the sustainable management of natural resources". To achieve 
this objective, the strategy defines the following priority areas:  
• improving technol ogical and market infrastructure , in order to increase the range of 
products with added value, productivity, quality and safety , and meeting EU standards;  
• strengthening the horizontal and vertical integration of the agr i-food sector and develop ing 
market contractual relations in the agricultural value -chains that should enable better 
exchange of market information and planning of production and purchase, as well as 
improving the marketing of agricultural products and their promotion in foreign mark ets; 
• providing access to production factors, agricultural land and its consolidation, capital and 
quality production inputs, and improv ing human potential in the sector; and  
• improving rural infrastructure for the sustainability of rural communities and eco nomic 
activities in rural areas.  
In pursuing these four priorities, special attention is to be paid to restructuring and 
moderniz ing the agricultural sector ( e.g. addressing the issues of land size and fragmentation, the 
ageing rural population , and the migration  thereof ) by initiating a strong investment cycle supported 
by public funds. Furthermore, the NSARD 2014 -20 outlines a set of specific objectives , namely:  
• the restructuring and modernization of the agr i-food sector ; 
 
• the regulation of markets, the organization of the food chain , and the improvement of the 
quality of  agricultural products;  
 
• the improv ement  of living and business conditions in rural areas ; 
 
• continuous access to knowledge and investment in human capital in agriculture ; 
 
• the completion of the functionality of the national food safety system ; and 
 
• the sustainable management of natural resources and the mitigation of the impact of climate 
change on agriculture.  
                                                
3 Law on Agriculture and Rural Development (Official Gazette No s. 49/2010, 53/2011, 126/2012, 
15/2013, 69/2013, 106/2013, 177/2014, 25/2015, 73/2015, 83/2015, 154/2015, 11/2016, 53/2016, 
120/2016, 163/2016, 74/2017 , and 83/2018) . 
4 Law on the Establishment of Agency for Financial Support of Agriculture and Rural Developmen t 
(Official Gazette No s. 72/2007 , 5/2009 , 43/2014 , 193/2015 , 39/2016 , and 164/2018) . 
5 Law on Quality of Agricultural Products (Official Gazette No s. 140/10, 53/1 1, 55/12, 106/13, 116/15, 
149/15, 193/15 , and 39/16) . 
6 Law on Organic Agricultural Production (Official Gazette No s. 146/09; 53/11; 149/15; 39/16 , and 
132/16) . 
7 Law on Wine (Official Gazette No s. 50/10; 53/11; 6/12; 23/13; 106/13; 188/13; 149/15; 39/16 , and 
172/16) . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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These objectives are linked to the implementation of the agricultural aspects o f Regulation 
(EU) No. 231/2014 of the European Parliament and of the EU Council of 11 March 2014 Establishing 
an Instrument for Pre -Accession Assistance (IPA II). Annex II thereof, on thematic priorities for 
assistance , indicates that assistance will be ai med at " increasing the ability of the agri -food sector 
to cope with competitive pressure and market forces as well as to progressively align with the Union 
rules and standards, while pursuing economic, social and environmental goals in balanced territorial  
development of rural areas" . To achieve these goals the E uropean Union planned to spend 
EUR 60 million during the period 2014 -20: EUR 5 million each year in 2014, 2015 and 2016; 
EUR 6 million in 2017; EUR 10 million in 2018; EUR 14  million in 2019; and EU R 15 million in 2020. 
However, these sums may not be entirely disbursed , as an audit on the implementation of the 
previous programme, IPA I, identified problems of absorption of EU assistance.  
4.1.3   Policy instruments  
4.1.3.1   Border measures  
4.1.3.1.1   Measures affecting imports  
The extent of tariff protection in the agricultural sector is relatively high. The simple average 
applied MFN tariff for agricultural products is 17.6% in 2019, which is more than triple that of non -
agricultural products (5.8%). The range of tariff rates o n agricultural products is between 0% and 
75%. The share of non -ad valorem  tariffs for agricultural products (13.5%) is considerably higher 
than that for non -agricultural products (0.2%), while the share of duty -free lines is much lower for 
agricultural pr oducts (24.8%) than for non -agricultural products (44.5%). The simple average MFN 
final bound rate of agricultural products is 18.2%, compared with 6.3% for non -agricultural products.  
While there is full duty -free treatment within the CEFTA, including for agricultural products, 
the simple average of preferential duties for agricultural products under the various FTAs is either 
equal to that of applied MFN duties (FTAs with Ukraine and Turkey: 17.6%) or only slightly lower 
(16.7% for the FTA with the EFTA, 1 2.8% for the agreement with the European Union). This situation 
reflects the exclusion of numerous tariffs lines, notably preparations of vegetables, fruit , meat and 
dairy products from preferential treatment.  
North Macedonia maintains one tariff -rate quota (Table 4.8) . The utilization rate is 
consistently low , due to  the fact that the  majority of the imported wheat quantities comes from 
neighbouring countries participating in the CEFTA.  
Table 4.8 Tariff -rate quotas and fill rates, 2013 -17 
Description 
of product  Method of administration  WTO tariff rate 
quota level   Fill rate  (%) 
(tonnes)  2013  2014  2015  2016  2017  
Other spelt, 
other than 
common 
wheat and 
meslin seed  Allocated  to MFN suppliers 
on a "first -come, first -
served" basis. Period of in -
quota imports: 1  January – 
31 December  80,000  16 30 28 17 28 
Source:  WTO notifications G/AG/ N/MKD/19, 23 October 2017; G/AG/ N/MKD/20, 14 November 2017; and 
G/AG/ N/MKD/22 and 23, 18 January 2018.  
4.1.3.1.2   Measures affecting exports  
North Macedonia notified the Committee on Agriculture that it provided no export subsidies 
and no export credits to agricultural products for the calendar years 2008 to 2018.8 
                                                
8 WTO documents G/AG/N/MKD/17, 31 July 2017; and G/AG/N/MKD/21, 16 January 2018, and 
information provided by the authorities for export subsidies in calendar year 2017 and for export credits 
throughout the period.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 4.1.3.2   Internal measures  
4.1.3.2.1   Support measures  
According to the NSARD 2014 -20, the Ministry of Agriculture , Forestry and Water Economy 
foresees EUR 150 million of annual budgetary transfers for the period 2014 -20. Th is amount was 
further increased to EUR 160 million with the Work Programme of the Governmen t for the period 
2017-20. 
According to one report, total budgetary transfers in the 2010 -15 period varied from 
EUR 129 million in 2014 to EUR 73 million in 2015 and 2011.9 
Although the total budgetary allocation has varied year to year, the structure of support 
remained relatively stable: direct support to producers represented the largest share (60% in 2015); 
followed by rural development measures (28% in 2015); and general  support to agriculture (12% 
in 2015).  
Table 4.9 Budget outlays and effective disbursements for yearly programmes of support 
(2010 -17) 
 Approved budgeta 
(MKD million)  Effective 
disbursement  
(MKD million)  % of realization 
of the 
programme  Share of 
total paid  
Programme 2010  
Programme for Financial 
Support in Agriculture  5,309.70  4,315.11  81.27%  91.0% 
Programme for Financial 
Support of Rural 
Development  579.00  430.57  74.36%  9.0% 
Total  5,888.70  4,745.68  80.60% 100.0% 
Programme 2011  
Programme for Financial 
Support in Agriculture  6,233.50  3,875.47  62.17%  99.9%  
Programme for Financial 
Support of Rural 
Development  344.60  5.26 1.53%  0.1%  
Total  6,578.10  3,880.73  59.000%  100.0%  
Programme 2012  
Programme  for Financial 
Support in Agriculture  6,932.00  5,296.40  76.41%  95.8%  
Programme for Financial 
Support of Rural 
Development  599.94  230.24  38.38%  4.2%  
Total  7,531.94  5,526.64   73.4%  100.0%  
Programme 2013  
Programme for Financial 
Support in Agriculture  6,885.00  5,624.02  81.69%  97.5%  
Programme for Financial 
Support of Rural 
Development  1,160.00  146.24  12.61%  2.5%  
Total  8,045.00  5,770.27   71.70% 100.0%  
Programme 2014  
Programme for Financial 
Support in Agriculture  6,499.40  6,426.61  98.88%  86.4%  
Programme for Financial 
Support of Rural 
Development  1,799.70  1,012.24  56.25%  13.6%  
Total  8,299.10  7,438.85   90.00% 100.0%  
                                                
9 Dimitrievski, D., Stamenko vska, I.V., Kotevska, A. (2016), Agriculture Statistics Database , SWG/EC 
JRC IPTS Project – Analysis of Agriculture and Rural Development Policies in Western Balkan Countries. Volk, 
T., Rednak, M., Erjavec, E., Zhllima, E., Gjeci, G., Bajramović, S., Vaško , Ž., Ognjenović, D., Butković, J., 
Kerolli -Mustafa, M., Gjokaj, E., Hoxha, B., Dimitrievski, D., Kotevska, A., Stamenkovska, I.J., Martinovic, A., 
Konjevic, D., Spahic, M., Bogdanov, N., Papić, R., and Todorović, S. (authors); Volk, T., Erjavec, E., Ciaian, P., 
Gomez y Paloma S. (eds.) (2017), Monitoring of agricultural policy developments in the Western Balkan 
countries , EC, J RC. Viewed at: http://seerural.org/wp -content/uploads/2017/06/Monitoring -of-agricultural -
policy -developments -in-the-Western -Balkan -countries.pdf . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
- 83 - 
 
  Approved budgeta 
(MKD million)  Effective 
disbursement  
(MKD million)  % of realization 
of the 
programme  Share of 
total paid  
Programme 2015  
Programme for Financial 
Support in Agriculture  6,486.66  6,308.90  97.26%  84.6%  
Programme  for Financial 
Support of Rural 
Development  1,818.44  1,145.21  62.98%  15.4%  
Total  8,305.10  7,454.11   89.70% 100.0%  
Programme 2016  
Programme for Financial 
Support in Agriculture  5,613.02  5,491.25  97.83%  76.8%  
Programme  for Financial 
Support of Rural 
Development  1,883.90  1,657.52  87.98%  23.2%  
Total  7,496.92  7,148.77  95.30%  100.0%  
Programme 2017  
Programme for Financial 
Support in Agriculture  6,394.00  6,328.93  98.98%  82.7%  
Programme  for Financial 
Support of Rural 
Development  1,707.24  1,322.00  77.43%  17.3%  
Total  8,101.24  7,650.93   94.40% 100.0%  
a Amount of approved budget in the programme.  
Note:  The indicated amount paid per programme is the figure for the amount paid in the given budget year 
(period from 1 January to 31 December of the year).  
Source:  Information provided by the authorities.  
Direct payments  for producers are set out in Table 4.10. All measures are based on either 
production quantities, animal numbers, or area under cultivation. In some cases, payments were 
made available each year in the 2010 -2017 period, others were applied for only one or two years, 
while other measure s ceased. There also appears to be some overlap among measures, at least for 
some years, such as separate measures based on production and area for grapes, orchards, and 
vegetables. The measures covered by Table 4.10 include punctual intervention measures aimed at 
compensating income losses of farmers due to price fluctuations  on the market. This explains the 
fact that payments under these measures were made only in certain years and that in some cases 
different subsidies were granted in parallel with respect to the same product. In general, there is a 
tendency towards the direct payments policy , to simplify the sy stem and to align it with the EU 
common agricultural policy.  
In addition, some of the measures also relate to improving production efficiency, for example 
the payments for: cereal seeds; vegetable, vine, fruit and flower propagation material; drip 
irrigation; and production under controlled conditions.  
Table 4.10 Direct payment schemes and input subsidies, 2010 -17  
Subsidy name and main criteria  Unit 2010  2011  2012  2013  2014  2015  2016  2017  
I - PAYMENTS BASED ON OUTPUT (PRICE AIDS)   
Dairy premium:  granted for cow, 
sheep and goat milk delivered to 
dairies  EUR/litre  0.04 0.06 0.06 0.06 0.06 0.06 0.06 0.06 
Tobacco  premium : granted for sold 
small leaf tobacco (paid for the 
previous year 's harvest)  EUR/kg  0.98 0.98 0.98 0.97 0.97 0.97 0.97 0.97 
Additional payment for rice : granted 
for rice shell sold to registered 
buyers; decreasing payments 
depending on the area under 
cultivation (full amount for 0.2 -2.5 
ha) Max. 
EUR/kg  - - 0.06 - - - - - 
Additional payment for vegetables 
for processing:  granted for 
vegetables sold to the processing 
industry ( in addition to payments 
per ha); different amounts by 
variety of vegetable  EUR/kg  0.02 0.02; 
0.03 0.02; 
0.03 0.02; 
0.03 0.02; 
0.04 0.02; 
0.11 0.02; 
0.05 0.02; 
0.05 WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 Subsidy name and main criteria  Unit 2010  2011  2012  2013  2014  2015  2016  2017  
Additional payment for fruits for 
processing : granted for fruits sold to 
the processing industry ( in addition 
to payments per ha)  EUR/kg  - - 0.03 0.03 0.03 0.03 0.03 0.03 
Payment for wine grapes : granted to 
family farms for wine grapes sold to 
registered processing plants  EUR/kg  0.03 0.03 0.03 - - - - 0.03 
Payment for buyout of wine grapes: 
different payments depending on 
quantities sold (2010) or grape 
variety (2011)  EUR/kg  0.07; 
0.09 0.03; 
0.05; 
0.12 - - - - - - 
II - PAYMENTS BASED ON AREA   
Payment for field crops excluding 
tobacco: decreasing payments 
depending on  the area under 
cultivation (from 2010 , full amount 
for 0.3 -20 ha; from 2013 , full 
amount for 0.3 -10 ha)  Max. 
EUR/ha  130 138 146 146 146 130 114 97 
Additional payment for cereals sown 
with certified seed : in addition to 
payments for field crops; decreasing 
payments depending on the area 
under cultivation (from 2010 , full 
amount for 0.3 -20 ha; from 2013 , 
full amount for 0.3 -10 ha)  Max. 
EUR/ha  41 49 49 49 49 65 81 97 
Payment for wheat : paid for min . 
0.3 ha and max. 10 ha EUR/ha  - - - - 49 - - - 
Additional payment for forage crops:  
in addition to payments for field 
crops  EUR/ha  - - 16 16 16 16 16 16 
Additional payment for rice and 
sunflower s: in addition to payment 
for field crops; from 2014 , 
decreasing payment depending on 
the area under cultivation (full 
amount for 0.3 -10 ha)           
rice and sunflower s Max. 
EUR/ha  - 57 49 49 49 49 49 49 
drip-irrigated sunflower s Max. 
EUR/ha  - - - - - - 97 97 
corn (from 2016 , only drip -
irrigated)  Max. 
EUR/ha  - - 16 - - - 49 - 
poppy seeds  Max. 
EUR/ha  - - - - - - 49 49 
Additional payment for cereals and 
sunflower s: in addition to payment 
for field crops; paid for min . 10 ha 
and max . 50 ha; min . yield 4 t/ha 
for wheat, 3  t/ha for barley, rye, and 
oats, and 1.8  t/ha for sunflower s EUR/ha  - - - - - - 78 78 
Payment for vegetables:  granted for 
production in the open air and 
plastic tunnels; min . eligible area 
0.2 ha; different amounts depending 
on the variety of vegetable  EUR/ha  325 325-
585  98-
488  97-
487  97-
487  97-
487  97- 
487 97- 
487 
Additional payment for vegetables 
produced under  controlled 
conditions : granted for tomato es, 
pepper s, cucumber s and cut flowers 
(in addition to payment for 
vegetables); from 2013 , min. 
quantities sold: tomato es 40 t/ha; 
pepper s 20 t/ha; cucumber s 80 t/ha 
for heated greenhouses; tomato es 
8 t/ha; pepper s 4 t/ha; cucumber s 
16 t/ha for heated plastic tunnels , 
and from 2013 also for strawberries  EUR/ha  1,301  2,438  1,463  1,462  1,461  1,46
1 1,461  1,463 
Payment for orchards:  granted for 
the area under orchard; min . eligible 
area 0.2 ha; min . seedlings/ha; 
different amounts depending on 
variety of fruit; decreasing payment 
depending on the area under 
cultivation (from 2010 , full amount 
for 0.3 -5 ha; from 2012 , for 0.2 -3 
ha; from 2014 , for 0.2 -5 ha)  Max. 
EUR/ha  293- 
710 569 244-
455 244-
536 244-
536 244-
536 243- 
536 243-
1,463 WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 Subsidy name and main criteria  Unit 2010  2011  2012  2013  2014  2015  2016  2017  
Payment for vineyards : granted for 
the area under vineyards; min . 
eligible area 0.2 ha; min . 1,500 
seedlings/ha; decreasing payments 
depending on the area under 
cultivation (from 2012 , full amount 
for 0.2 -3 ha; from 2014 , full amount 
for 0.2 -5 ha)  Max. 
EUR/ha  650 650 650 650 649 649 649 650 
Additional payment for vegetables, 
orchards and vineyards : granted in 
addition to area payments for 
vegetables, orchards and vineyards 
for conversion from cereal 
production to vegetable, fruit or vine 
production  % - - - - - - 30 30 
Payment for seeds:  granted for the 
area under quality and certified 
seeds; different amounts for arable 
crops and tobacco seeds; decreasing 
payment depending on the area 
under cultivation (from 2012 , full 
amount for 0.3 -10 ha)  Max. 
EUR/ha  228- 
975 195 244 224-
975 243- 
975 243- 
975 243- 
975 243 
975 
Payment for decorative and fast -
growing seedlings : granted for the 
area under decorative and fast -
growing seedlings which are 
stipulated in the Annex of the 
Programme for direct payment for 
2016  EUR/ha  - - - - - - 97 97 
Payment for ostrich farming : 
granted for agricultural holdings 
which are registered for the keeping 
of ostrich es and have at least 4 
adult ostriches   EUR/head  28 28 28 28 28 28 28 28 
Payment for registered wintered bee 
hives: min. 35 hives  EUR/hive  8 8 10 10 10 10 10 10 
Additional payment for breeder 
queen:  granted for agricultural 
holdings which are registered for the 
keeping of breeder queen s; support 
is per beehive family which is 
included in the selection and 
production of the breeder queen   EUR/hive  - - - - - 16 16 16 
III - INPUT SUBSIDIES   
Payment for cereal seeds : different 
payment for production of basic and 
pre-basic cereal seeds  EUR/kg  - - - 0.13; 
0.32 0.13; 
0.32 0.13; 
0.32 0.13; 
0.32 0.13; 
0.32 
Payment for seedlings : granted for 
the production of  seedlings and 
young plants:           
coil vine and fruit seedlings  EUR/piece  0.24 0.24 0.41 0.41 0.41 0.41 0.41 0.41 
vegetable planting material 
(min. 500,000 seedlings/year)  EUR/piece  - - - 0.08 0.08 0.08 0.08 0.08 
flower planting material (min. 
500,000 seedlings/year)  EUR/piece  - - - - - 1.14 - - 
Payment for day -old chicks : granted 
for broiler and female chicks; from 
2013, different amounts for chicks 
produced for own farm and for 
market  EUR/chick  0.05 0.05 0.05 0.03; 
0.06 0.03; 
0.06 0.03; 
0.06 0.05; 
0.08 0.05; 
0.08 
IV - INSURANCE   
Insurance subsidy:  co-financing of 
crop and livestock insurance 
premiums; limited eligible areas for 
crop insurance subsidies (cereals 
max. 10 ha; tobacco max . 1 ha; 
vegetables max . 2 ha; orchards and 
vineyards max . 5 ha)  % 60 60 60 60 60 60 60 60 
Note:  Additional degressive payments are subject to production thresholds.  
Source:  Agricultural statistics database compiled for North of Macedonia under the SWG projects. Viewed  at: 
http://app.seerural.org/agriculturalstatistics/.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 4.1.3.2.2   Price controls  and market price support systems  
North Macedonia does not apply any protective prices or any kind of market price support 
schemes as a consequence of its accession commitments to WTO.  
The Agency for stock reserves operates on the market but its competence is limited to the 
management of food security reserves. It manages  only two primary agricultural products : wheat 
and barley. It applies competitive and transparent procurement procedures in accordance with the 
general procurement law. After accession  to the WTO , the market price support operations 
competence  was discontinued .  
When market  prices are lower than average production costs , the Government , based on a 
proposal by the Ministry of Agriculture , can decide to establish a compensation for farmers for 
defined quantities of wheat purchased by the Agency for stock reserves. The Agency for Financia l 
Support in Agriculture and Rural Development  is in charge of the distribution of that support. 
However, this procedure , which was introduced in the Law on Agriculture and Rural Development , 
has never been applied . Support in the case of a drop in market prices is provided , in practice, 
through increased direct payment subsid ies. 
4.1.3.2.3   Other measures  
An insurance subsidy scheme exists, which provides a subsidy of up to 60% of the cost of the 
insurance premium, up to a maximum subsidy of EUR 3,253 per far m, for crop, livestock, and 
agricultural yield insurance. Under the scheme:  
• crop insurance is available for weather -related risks for all major commodities, including 
meadows but not tobacco;  
• livestock insurance is available for most animal species, includ ing bees and fish, and dead 
animals (including emergency slaughter),  with an option to cover veterinary treatment; and  
• Area Yield Index insurance, which was introduced in 2014, is intended to protect producers from 
risks associated with reduced yields due to adverse weather events and biological risks.10 
4.1.3.3   Levels  of support  
The most recent notification by North Macedonia for domestic support was for calendar years 
2005, 2006, and 2007.11 
Table 4.11 describes the level of support for the years 2010 -15, reportedl y calculated 
according to the OECD methodology but excluding the value of market price support.12 The OECD's 
methodology calculates the value of support via a number of indicators, including the Producer 
Support Estimate (PSE) for gross transfers from consu mers and tax payers to agricultural producers; 
the Total Support Estimate (TSE) for transfers to the agricultural sector in general; and Single 
Commodity Transfers (SCT s) for transfers to specific commodities. The PSE represents the value of 
transfers to p roducers, unlike support under the Amber, Blue and Green Boxes under the WTO.13 
Therefore, the value of support as notified to the WTO is not comparable with the values calculated 
by the  OECD.  
                                                
10 Insurance Supervision Agency (2015). Presentation to the International Insurance Forum in Mun ich in 
June 2015. Viewed at: http://www.internationalinsuranceforum.com/prop/wp -
content/uploads/2014/10/22_Zoran -STOJANOVSKI.pdf . 
11 WTO docu ment G/AG/N/MKD/10, 15 February 2011.  
12 Dimitrievski , D., Stamenkovska , I.V., Kotevska , A. (2016), Agriculture Statistics Database , SWG/EC 
JRC IPTS Project – Analysis of Agriculture and Rural Development Policies in Western Balkan Countries , Table 
8-3. 
13 OECD (2017), Agricultural Policy Monitoring and Evaluation 2017 , OECD Publishing, Paris. Viewed at: 
http://dx.doi.org/10.1787/agr_pol -2017-en. WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 Table 4.11 Budgetary support to agriculture according to the OECD/PSE classification, 
2010 -15 
(EUR million)  
  2010  2011  2012  2013  2014  2015  
Budgetary transfers to agricultural producers (PSEb)  75.1 54.2 82.7 63.5 107.8  60.8 
A.2. Payments based on output  30.7 35.3 29.7 11.5 39.7 25.4 
B. Payments based on input use  5.7 0.7 3.3 0.8 4.4 17.2 
B.1. Variable input use  0.3 0.2 0.4 0.6 0.5 - 
B.2. Fixed capital formation  5.2 0.4 2.7 0.2 3.4 17.2 
B.3. On -farm services  0.2 0.2 0.1 0.1 0.5 - 
C. Payment s based on current 
area/animal/receipt/income/product  38.5 18.2 49.7 50.3 59.4 18.2 
D. Payment s based on non -current 
area/animal/receipt/income/product  - - - - - - 
E. Payments based on non -current 
area/animal/receipts/income, production not required  - - - - - - 
F. Payments based on non -commodity criteria  - - - - - - 
G. Miscellaneous payments  0.2 0.0 0.1 0.9 4.3 - 
General Services Support Estimate (GSSE)  7.3 17.3 18.0 17.4 12.4 11.3 
H. Agricultural knowledge and innovations system  1.0 0.9 1.2 1.2 1.3 1.3 
I. Inspection and control  5.2 5.5 5.2 5.6 6.1 6.2 
J. Development and maintenance of infrastructure  1.0 8.5 8.4 9.4 5.0 3.8 
K. Marketing and promotion  0.0 2.4 3.2 1.2 0.0 - 
L. Public stockholding  - - - - - - 
M. Miscellaneous  - - - - - - 
Budgetary transfers to consumers (CSEb)  0.9 1.0 1.4 0.5 0.2 0.1 
Total budgetary transfers to agriculture (TSEb)  83.4 72.5 102.2  81.4 120.3  72.1 
Measures from Agricultural Policy Monitoring ( APM) not 
included in TSEb  0.6 0.1 0.2 1.0 8.5 1.1 
Note:  PSE is composed of Market Price Support (MPS), which is calculated mainly as the price gap between 
domestic and border prices, and PSEb further disaggregated based on implementation criteria.  
 Only the budgetary part of PSEb is presented in the table (MPS is not calculated).  
 For more information, see: OECD' s Producer Support Estimate and Related Indicators of Agricultural 
Support: Concepts, Calculations, Interpretation and Use (The PSE Manual). OECD Publishing, Paris. 
Available at: http://www1.oecd.org/agriculture/topics/agricultural -policy -monitoring -and-
evaluation/documents/producer -support -estimates -manual. pdf. 
Source:  Agricultural statistics database compiled  for North Macedonia  under the SWG projects. Viewed  at: 
http://app.seerural.org/agricultural -statistics/ . 
4.2  Mining and Energy  
4.2.1   Mining  
According to the authorities, i n 2016, mining and quarrying accounted for 1.2% of GDP. In 
2018, there was a total of 354 concessions for the exploitation of mineral resources, of which: 14 
for metallic mineral resources; 6 for coal; 5 for gypsum; 40 for or namental stones (marble, granite, 
travertine, and onyx); 24 for water; and 265 for other non -metallic mineral resources. The same 
year, there were 23 active detailed geological research concessions (6 for metallic mineral resources, 
4 for coal, and 13 for non-metallic mineral resources and water).  
So far, the Government has awarded three concessions for prospective geological researches, 
a new category of concessions created in 2013, in order to allow preliminary researches in vaster 
and still unchartered g eographical areas (5,000 km2 maximum) compared with detailed geological 
research concessions. After completing the prospective research, the concessionaire may submit a 
request to obtain a concession for detailed geological explorations in several location s, in an area 
that does not exceed 2.5% of the total area explored. The results for the rest of the area explored 
come into the possession of the State.  
Table 4.12 describes  the evolution of the production of metallic minerals between 2010  and 
2017.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 Table  4.12 Production of metallic minerals, 2010 -17 
 
2010  2011  2012  2013  2014  2015  2016  2017  
Produced lead (Pb) 
concentrate 
(tonne)  52,487  47,982  48,455  58,816  50,678  42,501  43,111  54,401  
Produced zinc (Zn) 
concentrate  
(tonne)  61,948  53,383  51,009  51,796  54,407  51,547  50,361  55,719  
Silver (Ag) in Pb 
and Zn 
concentrate  
(kg)  22,558  16,979  19,871  57,468   20,247  15,627  15,267  15,869  
Produced cathode 
copper  
(kg)     1,180,399  1,877,834  1,740,748  2,268,380  1,395,946  958,235  
Copper 
concentrate, 
damp  
(tonne)  40,954  39,099  46,899  48,965  42,376  47,140  47,809  42,813   
Source:  Information provided by the authorities . 
4.34.   According  to the Mineral Resources Law, 201214, the Government is the g rantor of 
concessions.  The Ministry of Economy is responsible for awarding concessions for prospective 
geological research, detailed geologi cal research, and exploitation  of mineral resources, and for the 
issuance of exploitation licences. The inspect ion of  the implementation of the Law is monitored  by 
the State Inspectorate for Technical Inspection. Environmental aspects are dealt with by the State 
Environmental Inspectorate , and the supervision and control over the payment of the mining fees is 
in the remit of the Public Revenue Office.  
Concessions for the exploitation of mineral resources are awarded on the basis of  a complete 
study based on the results of detailed geological researches, and of a public call with electronic 
auction if the owner of the results of the research is the State. If the results are owned by a private 
person, the concession for exploitation i s awarded automatically to the person concerned. If public 
companies, public institutions, or entities which are owners of the land request the concession, it is 
awarded on the basis of a simple authorization.  
The duration of the concession is variable, a nd can be renewed; the total duration cannot 
exceed 30 years. Effective exploitation can only start after the granting of an exploitation licence, 
based on an environmental impact assessment and on technical and financial abilities; the 
concessionaire must  request these within two years of the signature of the concession contract.  
A simplified procedure was put in place in 2014 for the exploitation of minerals linked to the 
construction of roads.  
The concessionaire of a detailed geological exploration conc ession must pay a one -time 
mining fee for using the area. The amount of the fee depends on the type of mineral mentioned in 
the concession.  
The holder of an exploitation concession must pay:  
• an annual usage fee , the amount of which depends on the type of mineral exploited;  and 
• a fee proportional to the quantity of the exploited mineral.  
A large part of the revenue collected (78%) is allocated to the municipality where the 
concession is located, while the remainder (22%) is attributed the state  budget. Four percent of the 
amount attributed to the State must be allocated to the re -cultivation and rehabilitation of the 
degraded mining areas.  
For metallic minerals, the concession fee is 2% of the market value (as set by the London 
Metals Exchange) of concentrated metals. For decorative stones, the fee depends on the type of 
stones (for marble, it is EUR 15 per cubic metre; for granite, EUR 9 per cubic metre; and for onyx 
                                                
14 Official Gazette No. 136/12 of 5 November 2012. WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 or travertine, EUR 6.5 per cubic metre).  For minerals for the construction indu stry, the fee is 
EUR 0.15 per ton ne.  
The State is involved in seven mining concessions (four for detailed geological researches and 
three for the exploitation of coal)  and three  concessions for the exploitation of non -metallic mineral 
resources.  
Of the 3 54 concessions currently exploited, around 13% are held by foreign companies . All 
three prospective geological research concessions  are held by foreign companies.  
4.2.2   Energy  
Oil and coal constitute the main primary energy supply sources in North  Macedonia. Oil 
products were the lead source in 2016 (Chart 4.2).  
Chart 4.2 Total Primary Energy Supply (TPES) by energy source
 
Note:  Coal includes peat and oil shale, where relevant. Other includes crude oil, and geoth ermal and solar 
energy. The shares of electricity in this chart correspond to imports of electricity.  
Source:  International Energy Agency (IEA) statistics database.  
4.2.2.1   Overall energy strategy, including environmental aspects  
The Ministry of Economy , through its energy department , is the authority in charge of defining 
the country's  overall energy strategy. The Ministry is assisted by an independent agency , the Energy 
Regulatory Commission (ERC), which  was set up in 200215. A 2003 amendment to the Law on 
Energy16 strengthened the Commission's  power and made it fully compliant with the requirements 
deriving from Directive No. 5 4/2003 of the European Parliament and of the Council of the European 
Union of 26 Ju ne 2003 concerning common rules for  the internal market in electricity, and for the 
establishment of an independent regulatory body. A further reform in 201117 extended the scope of 
competence of the ERC to water. The independence of the ERC was reinforced by the new Energy 
Law of May 201818, which transposes the EU Third Energy Package . 
The Commission for the Protection of Competition  (CPC) is in charge of competition and state 
aids issues but , so far , it has never opened an enquiry in the energy sector . 
North  Macedonia is a party to:  the Energy Charter Treaty; the Energy Comm unity; and the 
Agreement of the Un ited Nations Framew ork Convention on C limate Change, including the Kyoto 
                                                
15 Amendment to the Law on Energy, Official Gazette No. 94/02 . 
16 Official Gazette No. 38/03 . 
17 Official Gazette No. 06/16 . 
18 Law No. 96/2015 of 21 May 2018.  Official Gazette No. 96/18 . 
22.0%
46.6%7.6%3.8%7.7%3.0%
9.3%
Oil products Coal Biofuels and waste Natural gas Electricity Hydro OtherChart 4. [Macedonia] Total Primary Energy Supply (TPES) by energy source
2012 2016
39.9%
32.7%7.5%6.6%6.6%6.1%0.6%
Coal includes peat and oil shale, where relevant. Other includes crude oil and geothermal and solar energy.
The shares of electricity in these graphics correspond to imports of electricity  
Source:    International Energy Agency (IEA), statistics database. 2,990 ktoe 2,662 ktoe
Note:    WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 Protocol, and the Paris Agreement. In addition to national considerations, the energy policy of the 
country is geared towards transposing the EU energy acquis  in terms not only of liberalization but 
also of energy security, energy efficiency and environmental objectives.  
The Strategy for Energy Development in Macedonia by 2040, replacing a similar document 
from 2010 and running initially until 2030, is in preparation and should be adopted by the 
Government by the end of 2019. This Strategy will set the following objectives:  
− long-term goals for the development of individual energy activities to ensure security in 
the supply  of various types of energy ; 
− connection of the energy systems of North Macedonia to the energy systems of other 
countries ; 
− long-term forecasting of investment and financing needs in the production, transmission 
and distribution capacities , in order to meet  energy needs ; 
− renewable energy and energy -efficiency policies ; 
− encouraging the competitiveness of energy markets ; and  
− obligations undertaken to ratify international agreements , including an integrated 
strategy on energy and climate change.  
The energy -efficiency policy is more specifically defined by the 2010 Strategy for 
Improvement of Energy Efficiency until 2020 . The indicative target for total energy savings by the 
end of 2018, determined on the basis of the Energy Efficiency Strategy and the first Nati onal Energy 
Efficiency Activities Plan (NEEAP), is at least 9% of the average annual consumption of final energy 
in the period 2002 -06. For the fulfilment of this target, the Government has, by law, an obligation 
to adopt three NEEAPs. In July 2017, it ado pted the Third Energy Efficiency Action Plan for the period 
2016-20; the envisaged national energy saving target is 148.72 ktoe by 2018 and 226.27 by 2020. 
The planned target of 102.5 ktoe for 2016 was achieved.  
4.50.   For the purposes of the transposition of Ene rgy Efficiency Directive 2012/27/EU, of Energy 
Performance of Buildings Directive 2010/31/E U, and  of Regulation 2017/1369 for establishing a 
framework for indicating energy consumption, the Ministry use d technical assistance to draft the 
text on  the Law on  Energy Efficiency. A draft version of this Law is available on the National 
Regulatory Po rtal (ENER) since December 2018, and p ublic debate took place in February  2019.  
4.51.   The Law introduces the obligation to reconstruct , annually, at least 1% of the total area of 
the buildings (with a useful floor area of at least 250 m2) used and owned by central government 
bodies . A long -term strategy for the reconstruction of residential, public and commercial buildings 
is planned to be developed  by 2030, in order to apply energy -efficiency measures and reduce 
environmental pollution. This will be implemented through three -years program mes.  
4.52.   In order to ensure the efficient monitoring and verification of the implementation of the 
energy -efficiency  measures, it is envisaged that the Energy Agency manage, maintain and upgrade 
the Monitoring and Verification Platform (MVP) , available online.  The establishment of an Energy 
Efficiency Fund , in the form of an independent legal entity , is also envisaged.  
4.53.   The renewable energy policy is determined by the 2010 Strategy for Utili sation of Renewable 
Energy Sources by 2020.19 North Macedonia transposed the EU acquis  regarding Renewable Energy 
Sources (RES), Directive 2009/28/EC of the European Parliament and of the Council of 23  April 2009 , 
on the promotion of the use of energy from renewable sources. The Directive requires the setting of 
targets as a percentage of the gross final energy consumption , and indicates that strong energy -
efficiency measures should be applied.  
                                                
19 Ministry of Economy online information. Viewed at: 
http://iceor.manu.edu.mk/Documents/ICEIM/Strategies/Strategy%20for%20utilization%20RES.pdf . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 4.54.   According to State Statistical Office data, the share of RES was 18% in 2016, and 19.6% in 
2017. According to the RES Action Plan, the percentage share of RES of final energy consumption 
should reach  23.9% by 2020, and 25 .0% by 2025. This should be achieved through the construction 
of new RES plants , and through  reinforced energy -efficiency measures .  
4.55.   Tables 4.13 and 4.14 detail, respectively, the gross production of renewable energy between 
2012 and 201 6, and the share of elect ricity from renewable sources in total electricity production 
and in gross national electricity consumption in percentages  for the same years.  
Table 4.13 Gross production of renewable energy, 2012 -16 
(Ktoe) 
Energy 2012  2013  2014  2015  2016  
Total 312.92  370.15  343.14  389.28  368.56  
Source:  State Statistical Office's Makstat Database. Viewed at: 
http://makstat.stat.gov.mk/PXWeb/pxweb/en/MakStat/ . 
Table 4.14 Share of electricity from renewable sources in total electricity production and 
in gross national electricity consumption, 2012 -16 
(%) 
 2012  2013  2014  2015  2016  
In total electricity production  16.7 26.1 24.0 35.9 36.7 
In gross national electricity consumption  11.7 18.7 15.5 24.9 27.0 
Source:  State Statistical Office's Makstat Database. Viewed at: 
http://makstat.stat.gov.mk/PXWeb/pxweb/en/MakStat/ . 
4.56.   In February 2019, the Government adopted a Decision20 setting to 10% t he percentage share 
of renewable energy sources in final energy consumption in transport by 202 0. 
4.57.   In the same month, it also adopted a decree on measures for supporting the production of 
electricity from renewable energy sources .21 This decree modified the pre -existing  feed-in tariffs , 
and applies them  to 185 preferential producer s whose present and planned capacities are the 
following:  
• hydroelectric power plant s: 79 small hydro -power plants , totalling 72.46  MW, and an 
additional 30 planned plants , totallin g 34.06  MW; 
• photovoltaic plants: 102 plants , totalling 16.71  MW; 
• wind power plant s: one plant with a capacity of 13.2  MW, and one plant under 
construction with a capacity of 36 MW ; 
• biomass thermal  plants : six plants under construction with a capacity of 4.3  MW in total;  
• biogas thermal power  plants : three  plants with a capacity of 6.99 MW  in total.  
In a February 2019 Decision22, the G overnment set a cap on the feed -in tariff allowable, by 
type of renewable energy (86 MW for wind, 10 MW for biomass, 20 MW for biogas, and 200 MW for 
photovoltaic). In addition to the feed -in tariff, premiums are granted to photovoltaic and wind 
powerplant s, on the basis of a tender and an auction, within a limit of 50 MW for wind and 30 MW 
for photovoltaic.  
The draft Rulebook on Renewable Energy Sources, which is in the final phase of adoption, will 
create the notion of "pro -sumer", i.e. it will allow individuals having surplus electricity production 
                                                
20 Decision on the national mandatory targets for the participation of energy produced from renewable 
sources in the gross final energy consumption, and for the share of energy produced from renewable sources in 
the final energy consumption in transport, Official Gazette No. 29/2019 . 
21 Official Gazette No.  29/2019.  
22 Official Gazette No. 29/2019 . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
- 92 - 
 
 generated by photovoltaic installations on their roof to reinject the surplus in the network and to 
receive monetary compensation . 
In order to fully transpose Directive 28/2009/EC on the promotio n of renewable energy and 
biofuels, a new law on biofuels  and an  action plan for the use thereof  will soon be adopted. They will 
set the obligatory percentage of biofuels, the monitoring system, the price of mixed biofuels, and 
the possibilities for subsidizing their production and use.  
4.2.2.2   Coal 
As illustrated in Chart 4.2 above, coal represents a declining share of the total primary energy 
supply of the country (46.6% in 2012, 32.7% in 2016). It is essentially consumed in the produc tion 
of electricity.  
The trade balance for coal (including peat, lignite and oil shale) during the period under review 
is described in Table 4.15.  
Table 4.15 Coal trade balance, 2012 -16 
(Ktoe)  
 2012  2013  2014  2015  2016  
Production  1,246 1,053 986 876 745 
Exports  8 0 0 2 2 
Imports  141 55 120 86 106 
Source:  IEA statistics database . 
Lignite accounts for the totality of the production, while imports are essentially composed of 
hard coal and coke. The importation  of coal and coal products at wholesale level, and the distribution 
of coal and coal products at wholesale and retail levels, are open to the private sector and to foreign 
operators without limitations, even though the largest consumer, and hence importer,  is the former 
electricity monopoly .  
4.2.2.3   Oil 
Oil products  account for over 40% of the energy consumed in the North Macedonia. The trade 
balance for the various types of oil products during the period under review is described in 
Table  4.16. 
Table 4.16 Oil and oil products trade balance, 2012 -16 
(Ktoe)  
 2012  2013 2014 2015 2016 
Crude oil  
Production  0 0 0 0 0 
Exports  0 0 7 0 0 
Imports  266 55 0 0 0 
Oil products  
Production  0 0 0 0 0 
Exports  270 190 166 161 172 
Imports  972 988 1,074  1,125  1,267  
Source:  IEA statistics database . 
North  Macedonia has no oil resources, and its only refinery was closed in 2013. The country 
imports all its oil products for domestic consumption, essentially from Greece and to a lesser extent 
from Bulgaria. Its crude oil pipeline, having become redundant, is n ow being transformed into an oil 
products pipeline. In the meantime, all imports of oil products are transported by tank trucks.  
The importation and wholesale and retail distribution of oil products is open to the private 
sector and to foreign operators w ithout restriction. Three companies, one of which is foreign, WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 dominate the market: OKTA, Makpetrol and Lukoil, alongside smaller oil traders. The three 
companies own most of the petrol stations, although some independent owners remain.  
State  intervention i s limited to the ownership of a 10% share in the pipeline, and to price 
regulation by the ERC, which sets the maximum refining and retail prices for oil derivatives and the 
maximum retail prices for blends of fossil fuels and bio -fuels.   
The entry  into for ce in 2015 of the October 2014 Law on Compulsory O il Reserves , which also 
transpose s the EU  acquis  in that area , has been delayed thrice,  but is now set to 1 January  2020.  
4.2.2.4   Gas 
The trade balance for gas during the period under review is described in Table 4 .17 below .  
Table 4.17 Gas trade balance, 2012 -16 
(Ktoe ) 
 2012  2013 2014 2015 2016 
Natural gas  
Production  0 0 0 0 0 
Exports  0 0 0 0 0 
Imports  114 130 111 112 176 
Source:  IEA statistics database . 
North Macedonia imports all its natural gas needs for domestic consumption via one 
interconnection point with Bulgaria. Interconnection capacities are auctioned through the South -East 
Europe Coordinate Auction Office. Works to achieve a second interconnection po int with Greece  are 
underway, and should be achieved by 2022.  
There is no legal regime per se for the exploration/production and refining of gas. However, 
in May 2018, the Law on Energy created a regime for the construction of new natural gas distribution 
systems. It stipulated that such construction shall be underta ken by legal entities on the basis of: 
(a) a contract for establishing a PPP awarded by the Government; and (b) a concession agreement 
for public services awarded by the Government, of a Build Operate Transfer (BOT) type, with a 
maximum duration of 35 year s. Foreign companies will be allowed to bid for such concessions.  
A new system for natural gas distribution in certain areas of the country may be constructed 
and managed by a public enterprise or by another legal entity established for that purpose by the  
local self -government unit.  
Regarding the transposition of the EU acquis, the 2018 implementation report of the Energy 
Community noted that the 2018 Energy Law transposed the requirements of the Third Energy 
Package and cleared the way towards ownership u nbundling and certification of the country's 
transmission system operator. According to this report, North Macedonia is the only south eastern 
Balkan country with a fully deregulated wholesale and retail market. However, as the supply market 
is dominated b y one operator and is limited to bilateral trading agreements, the market is illiquid. 
According to the same report, third party access is in place, but capacity allocation and transparency 
need to be improved, as they are not detailed enough on cross -border issues, and do not assess 
market demand for new investments. An entry/exit transmission tariff methodology is still missing. 
End-user gas prices are deregulated.  
The main importer of gas is the oil company Makpetrol, and the main consumer is CHP TE -, 
a municipal central heating company. There are six active retail suppliers. Customers are mainly 
industrial users, since the share of households in gas consumption is negligible. The importation and 
the wholesale and retail distribution of gas are open to th e private sector and to foreign operators 
without restriction.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 4.2.2.5   Electricity  
The trade balance for electricity and heating during the period under review is described in 
Table  4.18. 
Table 4.18 Trade balance for electricity and heating, 2012 -16 
 2012  2013  2014  2015  2016  
Electricity (GWh)  
Production  6,262  6,094  5,374  5,646  5,629  
Exports  72 62 113 2,656  160 
Imports  2,741  2,491  3,013  143 2,191  
Heat ing (Tj) 
Production  2,464  2,131  1,956  2,193  2,239  
Exports  0 0 0 0 0 
Imports  0 0 0 0 0 
Source:  IEA statistics database . 
Chart 4. 3 details the fuel mix of electricity produced in North Macedonia in 2012 and 2016.  
Chart 4.3 Electricity generation by fuel  
 
Note:  Other includes electricity generated from wind, oil, biofuels, and solar photo voltaic (PV).  
Source:  IEA statistics database.  
Between 2012 and 2016, the share of coal, while still dominant, fell from three quarters t o 
around one half of the total electricity generated, while the share of hydroelectricity nearly doubled, 
from one sixth to one third. The share of gas also more than doubled, from 4.8% to 10.1%. 
Production declined during the period under review.  
The shar es of the various sources of renewable energies in 2012 and 2016 are described in 
Chart 4.4.  
77.2%16.6%4.8%1.5%
Coal Hydro Gas OtherChart 4. [MKD] Electricity generation by fuel
2012 2016
51.4%
33.7%10.1%4.8%
Other include s electricity generated from wind, oil, biofuels, and solar PV. 
Source:    International Energy Agency (IEA), statistics database. 6,262 GWh 5,692 GWh
Note:    WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 Chart 4.4 Electricity generation from renewables, by source  
 
Source:  IEA statistics database.  
Electric production s temming from renewable sources nearly doubled in just four years, and 
notably diversified even though hydro -electricity still accounts for a very dominant share of the 
production.  
Chart 4.5 details the consumption by type of user for 2012 and 2016.  
Chart 4.5 Total final consumption of energy, by type of consumer  
 
Note:  Other refers to non -specified and non -energy use.  
Source:  IEA statistics database.  
The Energy Law transposed the EU Third Energy Package, fully unbundled the sector, and 
instituted the free choice of providers for all customers. Some by -laws remain to be adopted 
regarding, in particular, the universal supplier and the supplier of last resort for customers that 
choose the regulated prices seg ment of the market.  
The main electricity generation company is the state -owned utility Elektrani na Makedonija 
(ELEM), but the main operator of the distribution network, EVN Elektrodistribucija Skopje (EVN), 
also owns several hydro -power plants.  
99.7%0.3%
Biogases Hydro Solar PV WindChart 4. [MKD] Electricity generation from renewables by source
2012 2016
1.7%
91.8%1.2%5.3%
Source:    International Energy Agency (IEA), statistics database. 1,044 GWh 2,066 GWh
30.5%
23.6%29.4%12.0%1.4%3.0%
Industry Transport Residential Commercial and public services Agriculture / forestry OtherChart 4. [MKD] The total final consumption of energy by types of consumers 
2012 2016
21.6%
34.2%25.0%10.9%1.2%7.0%
Other refers to non -specified and non -energy use. 
Source:    International Energy Agency (IEA), statistics database. 1,899 ktoe 1,974 ktoe
Note:    WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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Electricit y generation is fully unbundled from electricity transmission, through the ownership 
model, whereby the main generator, ELEM, and the transmission operator (currently MEPSO, soon 
to be replaced by a new company, NEMO) belong to two different branches of th e Government, 
acting independently. Distribution is a third, independent segment whose main operator is EVN. 
ELEM also operates a small closed distribution network, ELEM Energetika, and has a licence to supply 
customers in a limited geographic area. A new type of actor, the electricity trader, is still to be 
created.  
Access to the system and to the network is in line with the Third Energy Package acquis, since 
tariffs are approved and published, and interconnection capacities are allocated via the coordinat e 
auction platform or joint auctioning. Balancing services are not provided anymore at regulated prices 
because the transmission system operator started procuring balancing services in a non -
discriminatory and market -based manner.  
At the retail level, the new Energy Law introduces eligibility and, hence, the possibility for 
consumers to switch suppliers. Regulated prices remain available to individual households and small 
industry (less than 50 employees and EUR 10 million turnover) via the universal suppli er which is 
also be the supplier of last resort. The ERC launched a tender for the selection of that universal 
supplier in March 2019. Both ELEM and EVN bid, and EVN won the contract for five years. The precise 
modalities of regulated tariffs still have to  be determined by the ERC. The existing rules on customer 
protection, and especially protection of vulnerable customers, are expected to be revised soon in 
accordance with the new Law.  
4.3  Manufacturing  
Table 4.19 describes the share of manufacturing within to tal GDP and total employment, as 
well as the contribution to GDP and employment, exports and imports, of the main manufacturing 
sectors from 2012 to 2017. It shows that t he increase of total manufacturing within GDP is mainly 
due to the third largest manuf acturing sector, that of motor vehicles, trailers and semi -trailers, 
whose share of total manufacturing value added grew more than ten -fold between 2012 (0.6%) and 
2016 (7.1%).  
Table 4.19 Manufacturing sector, 2012 -17 
  2012  2013  2014  2015  2016  2017  
Value added at current prices (EUR million)a 776.6  808.0  937.7  1,067.0  1,186.7  1,269.7  
     % of total value added  11.8 11.4 12.6 13.5 14.2 14.6 
    Major manufacturing activities (% of total   
 manufacturing value added)       
  
        Food and beverages  15.9 20.9 20.3 19.4 19.3 .. 
        Wearing apparel  17.1 17.5 16.4 13.9 14.1 .. 
        Machinery and equipment n.e.c.  9.3 3.4 7.6 11.0 12.9 .. 
        Motor vehicles, trailers and semi -trailers  0.6 1.3 3.8 6.5 7.1 .. 
Employment ('000)a 126.9  131.5  132.9  137.2  137.6  143.3  
% of total employment  19.5 19.4 19.3 19.4 19.0 19.3 
    Major manufacturing activities (% of total 
 manufacturing employment)       
  
        Wearing apparel  33.0 31.3 29.5 28.5 27.1 25.5 
        Food and beverages  16.8 16.6 16.02 16.8 18.4 19.1 
        Motor vehicles, trailers and semi -trailers  1.20 3.82 6.90 9.5 9.2 11.8 
        Fabricated metal products, except 
machinery and equipment  6.39 6.21 5.69 5.4 5.7 5.4 
        Furniture  3.41 3.50 3.43 3.7 5.6 5.1 
Tradeb  
Exports (% of total merchandise exports)       
  
   Iron and steel  20.8 18.7 14.7 12.8 9.5 8.7 
   Chemicals  16.9 19.5 21.2 22.8 24.0 24.0 
   Other semi -manufactures  3.2 2.9 2.8 3.2 3.1 3.2 
   Machinery and transport equipment  9.9 13.3 21.0 24.7 27.8 29.5 
          Non-electrical machinery  5.2 7.0 9.3 11.4 12.4 11.3 
          Electrical machines  3.6 4.9 9.0 10.1 11.2 13.4 
          Transport equipment  1.2 1.4 2.8 3.2 4.2 4.8 
   Textiles  1.5 1.8 1.6 1.5 1.6 1.4 
   Clothing  15.0 14.6 13.6 11.8 10.7 9.3 
   Other consumer goods  4.4 4.6 4.9 5.4 5.7 6.3 
   Total manufacturing  71.8 75.4 79.9 82.0 82.5 82.3 WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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   2012  2013  2014  2015  2016  2017  
Imports (% of total merchandise imports)  
   Iron and steel  5.7 5.5 5.0 5.1 5.2 5.5 
   Chemicals  11.3 13.2 11.3 11.9 11.8 11.2 
   Other semi -manufactures  8.4 9.1 9.5 10.5 11.7 11.6 
   Machinery and transport equipment  15.8 17.6 18.8 20.3 21.4 21.7 
          Non-electrical machinery  5.0 6.2 5.8 6.0 6.0 5.6 
          Electrical machines  6.5 7.3 8.5 9.2 9.9 10.7 
          Transport equipment  4.4 4.1 4.4 5.0 5.5 5.4 
   Textiles  6.8 7.3 7.3 7.1 6.7 6.5 
   Clothing  1.0 1.1 1.1 1.1 1.2 1.2 
   Other consumer goods  4.9 5.3 5.3 5.5 6.0 5.6 
   Total manufacturing  53.9 59.0 58.2 61.4 64.1 63.2 
.. Not available.  
a The National Classification of Activities harmonized with the NACE Rev.2.  
b SITC Rev. 3.  
Source:  WTO Secretariat calculations, based on the State Statistical Office MakStat database. Viewed at: 
http://www.stat.gov.mk/PoslednoObjavenoVoMakstat_en.aspx ; and UNSD Comtrade . 
North Mac edonia managed, in recent years, to integrate successfully into the value chain of 
the global automotive industry by producing relatively labour -intensive parts (e.g. seats). The 
investment regime (Section 2.4), the incentives put in place by the Governmen t (Section 3.3.2), 
and the creation of TIDZs (Section 3.2.4) were certainly instrumental in this positive evolution. 
However, North Macedonia's manufacturing remains confronted with numerous challenges, such as 
a still suboptimal transport infrastructure ( Section 4.4.3.1), rising wages, lack of research, lack of 
links between multinationals installed in the TIDZs and local companies, lack of specialization, and 
standards issues.23 
The new (2018 -27) Industrial Strategy and its initial Action Plan (2018 -20), adopted by the 
Government in November 2018, is aimed at tackling these challenges in a systematic manner. It 
considers that the previous industrial strategy had some successes but  also weaknesses, and that 
there is a need to secure greatly increased state funding, to supplement state funding with donor/IFI 
funding, and to secure effective leadership, coordination, public private dialogue, reporting, and 
monitoring.  
The new Strateg y refocuses on manufacturing. Its basic mission is to "promote 
industrialization by stimulating the growth and development of the manufacturing sector in order to 
boost productivity, create good jobs, raise incomes and strengthen human capital, while addre ssing 
the challenges of the circular economy". It draws on the recent EU Commission communications on 
a revised EU Industrial Policy24, which sets several inter -related policy objectives: empowering 
people through the single market, going digital, building a circular and low carbon economy, 
investment, innovation and a cross cutting international dimension.  
It is articulated along six strategic objectives, namely:  
• reinforcing the manufacturing foundation of the economy;  
• raising manufacturing productivity, in novation and technology transfer;  
• catalyzing green industry/manufacturing;  
• stimulating manufacturing export (Section 3.2.4);  
                                                
23 Seizing a Brighter Future for All:  Former Yugoslav  Republic of Macedonia, Systematic Country 
Diagnosis , World Bank, 29 November 2018, pp. 242 -251. Viewed at: 
http://pubdocs.worldbank.org/en/606381543434479145/MKD -SCD-2018-ENG-Web.pdf . 
24 Commission Communication Industrial Policy: Reinforcing Competitiveness  (COM (2011) 0642 ); 
Commission Communication (COM  (2012) 582/3 ); A Stronger European Industry for Growth and Economic 
Recovery  (COM  (2014) 0014 ); For a European Industrial Renaissance and Commission Communication  
(COM  (2017 ) 479); Investing in a Smart, Innovative and Sustain able Industry - A renewed EU Industrial Policy 
Strategy . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 • building a learning manufacturing sector; and  
• a cross -cutting objective of implementation and coordination.  
Table 4.20 Strategic objectives and operationalizing measures of the Industrial Strategy  
1. Reinforce the 
manufacturing 
foundation  2. Raise 
productivity, 
innovation and 
technology 
transfer  3. Cataly ze green 
industry and 
green 
manufa cturing  4. Stimulate 
manufacturing 
export  5. Build a learning 
manufacturing sector  
Identify and target 
support to priority 
manufacturing 
subsectors, through 
smart speciali zation Strengthen the 
institutional base for 
technology 
transfer/ extension 
/absorpti on in 
support of the 
manufacturing sector 
(various EGP 
measures)  Undertake green 
regulatory reform  Institutional 
strengthening of 
export policy, with 
a focus on 
manufacturing  Increase manufacturing 
access to EU 
competitiveness and 
innovation fund s 
Maximi ze the 
capacity of the 
Economic Growth 
Plan (EGP) to be 
effective  Raise innovation 
levels among 
enterprises (EGP 
measure 3.3)  Green public 
procurement for 
high-impact goods 
and services  Strengthen FDI 
and export 
through economic 
diplomacy  Establish and 
strengthen technological 
and research 
departments (EGP 
measure 1.3)  
Focus FDI policy on 
the manufacturing 
sector  Support fast-growing 
SMEs (Gazelles) with 
technological 
development (EGP 
measure 3.1)  Embed sustainability 
as a core business 
strategy for 
manufac turers  Support for 
winning new 
markets and 
increase in sales 
(EGP measure 2.2)  Support to SMEs for 
professional upgrade 
and practice for newly-
employed young people 
(EGP measure 3.4)  
Stimulate 
investment (EGP 
measures 1.4, 1.5 
and 1.6)  Strengthen linkages  
between foreign 
investors and 
domestic 
manufacturers (EGP 
measure 1.2)  Support industry -led 
green manufacturing 
initiatives (greening 
value chains)  Support to 
increase 
competitiveness in 
new markets (EGP 
measure 2.1)  Strengthen the links 
between universit ies 
and manufacturing firms  
Develop TIDZs with 
a manufacturing 
focus Identify and support 
manufacturing key 
emerging 
technologies (KETs) 
and smart factories 
(industry 4.0 and 
factory 4.0)  Develop Industrial 
and Green Zones 
(IGZs) with a 
manufacturing focus Manufacturing 
export readiness 
support 
programme  Awareness -raising and 
training on circular 
economy, green 
industry/ manufacturing, 
closed-cycle 
manufacturing, energy 
efficiency , and clean 
production  
Further 
development of 
industrial clusters 
with a focus on 
innovation and 
competitiveness   Stimulate resource 
/energy efficiency 
and low 
carbon/resource 
efficiency/best 
available techniques 
in the manufacturing 
sector  Leverage 
manufacturing 
export through 
international 
standards  Establish a MakerSpace 
to encourage a maker 
mindset  
Support the 
establishment of 
value chains with a 
manufacturing 
focus, and link 
firms to global 
value chains   Support SMEs with 
remanufacturing  Establish an export 
point of contact  Technical expertise for 
domestic SMEs 
(financial support for 
micro firms – EGP 
measure 3.2)  
Creating conditions 
and preparation of 
legal bases for 
development of 
venture capital for 
manufacturing 
firms (EGP measure 
3.5)  Support SMEs with 
additive 
manufacturing/3D 
printing  Integrate export 
promotion 
information  International experts for 
domestic companies 
with a focus on 
manufacturing  
   Support to the 
export accelerator 
for SMEs   
Source:  Ministry of Economy, Industrial Strategy with a Focus on the Manufacturing Sector , October 2018 . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 4.4  Services  
4.4.1   Telecommun ications services  
The telecommunications sector of North Macedonia is largely liberalized, and offers a dynamic 
competitive landscape, although prices remain relatively high by international standards.  
Box 4.1 provides the main economic indicato rs of the sector, while Table 4.21 details the main 
tariffs applicable by type of telecom product for the last year available, 2017. The decline in the 
number of subscriptions and the number of mobile subscriptions does not necessarily reflect a lower 
penetration rate. These declines are due to two factors: the progressive disappearance of fixed lines; 
and, as far as mobile telephony is concerned, the fact that consumers often had subscriptions with 
two or three operators to avoid prices discrepancies betwe en on -net communications (i.e. between 
two customers with the same operator) and off -net communications (i.e. between customers with 
two different operators). Two of these operators merged during the period under review, and the 
differences between off -net and on -net prices were eliminated; hence there was no longer a need 
for multiple mobile subscriptions.  
Box 4.1 Main economic indicators in the telecom sector  
Total telephone subscribers (per 100 inhab. ): 2013  - 127.71; 2017  - 114.5  
 
Mobile phone subscribers (% tot. tel. subscribers) : 2013  - 94.56; 2017  - 84.94  
 
Internet users (per 100 inhab. ): 2013  - 55.28; 2017  - 78.24  
 
Broadband Internet subscribers (per 100 inhab.) : 2013  - 16.41; 2017  - 19.11  
 
Total telecommunications revenues (USD million) : 2014  - 434; 2015  - 319; 2016  - 310 
 
Mobile revenues (USD million):  2014 - 171; 2015  - 126; 2016  - 122 
 
Average Revenue Per User (ARPU) mobile subscriptions (USD/subscription/month) : 2014  - 6.4; 2015  - 5; 
2016 - 5 
Main actors  
Names and market shares of the leading companies for fixed telecom services  (2018): Makedonski Telecom 
(57.05%); One.VIP  (rebranded "VIP" in May 2016 ) (32.05%); Robi (6.81%); Neote (3.14%); Infel Net Plus 
(0.9%); Cable Call (0.05%)  
 
Name and market shares of the leading companies for mobile telephones services  (2018): One.VIP (49.28%); 
Makedonski Telecom (47.18%); Lycamobile (3.54%)  
 
Name and market share of the broadband Internet services  (2018): Makedonski Telecom (40.04%); One.VIP 
(29.7%); Robi (16.57%); Inel International (1.34%); Cabel Net (1.31%); Multimedia Net (1.29%); Cable Call 
(0.96%); other (7.91%)  
 
Foreign ownership participation in telecom companies : 
- Makedonski Telecom : Deutsche Telekom (via Magyar Telecom) (56.67% ); Government (34.8% ); 
International Finance Corporation (1.64% ); other minority shareholders (6.89%)  
 
- One.VIP : Austria Telekom (part of the America Movil group)  (100% )  
Establishment of new companies, mergers or closures since the last Review  
- Telecom Slovenije's  subsidiary , One, and Austria Telekom' s subsidiary , VIP, merged in October 2015 to form 
One.VIP ; 
 
- Makedonski Telecom and T -Mobile merged in July 2015 ; 
 
- The cable operator Blizoo combined its operations with its sister company One.VIP in May 2016 ; 
 
- Lycamobile, a Mobile Virtual Network Operator (MVNO), started operations in July 2016 ; and  
 
- Telekom Slovenije withdrew from One.VIP in November 2017 by selling its 45% stake to Austria Telekom, 
the majority owner of the company  
Source:  Information prov ided by the authorities.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 Table 4.21 Telecommunication prices, 2017  
Type of service  Worldwide  
ranking  Unit Price expressed  
in USD,  
in purchase power 
parity (PPP) terms  
Mobile -cellular basket  108 ITU basketa 25.49  
Mobile -cellular prices (on -net)b 168 Per-minute local call  0.08  
Mobile -cellular prices (off -net)c 168 Per-minute local call  0.08 
Mobile -cellular prices to fixed -
telephones  168 Per-minute local call  0.08  
SMS 168 Local SMS  0.21 
Fixed -broadband prices  164 Residential monthly subscription  34.7 
Mobile -broadband basket, prepaid  76 Handset -based (500 MB)  10.82  
Mobile -broadband basket, postpaid  71 Computer -based (1 GB)  12.99  
a The mobile -cellular basket refers to the price of a standard basket of mobile monthly usage for 
30 outgoing calls per month (on -net/off -net to a fixed line, for peak and off -peak times) in 
predetermined ratios, plus 100 SMS messages. For more elements of the ITU methodology, see: 
Measuring the Information Society, Report 2018 , Volume 1 , pp. 157 -171. Viewed at: 
https://www.itu.int/en/ITU -D/Statistics/Pages/publications/misr 2018.aspx . 
b Between two customers with the same mobile operator.  
c Between two customers with different mobile operators.  
Source:  ITU, Measuring the Information Society, Report 2018 , Volume 1 . 
The Agency for Electronic Communications (AEC), created in 200 5, is the independent 
regulator, with full enforcement powers , including fines, for the sector , while the Ministry of 
Information Society and Administration is the main policy maker in charge of telecommunications 
and information and computer technologies.  The AEC and the  Competition  Authority coop erate 
regarding telecommun ications competi tion matters.  
The telecommunication policy of North  Macedonia is geared towards the transpos ition of the 
EU acquis . In that respect , it transposed the 2009 EU regulatory framework for communications25 
into the 2014 Law on Electronic Communication26, its main telecommunication legislation . For this 
reason  also, the GATS commitmen ts undertaken for telecommunicati ons by North Maced onia, du ring 
its accession process to the WTO,  largely reflect those of the Eu ropean Union. 
According to ITU data, t he telecommunication regime  is overall very liberal, wi th the following 
activities fully  open to  compet ition since as early as 200527: local fixed lines; domestic fixed long 
distance; inte rnational fixed long distance; i nternational mobile telephony (3G and 4G); digital 
subscriber lines; cable -modems; fixed wireless broadband; leased l ines; Internet services; and c able 
television . Full wholesale access to the incumbent fixed network  was particularly instrumen tal in this 
liberal ization proces s. 
According to observers28, although the fixed telephony market was liberalized, the incumbent , 
Makedonski Telecom , continues to dominate the sector. Broadband services are widely available, 
with effective competition between Digital Subscriber Line ( DSL) and cable platforms complemented 
by wireless broadband and a developing fibre sector.  
In 2016, the AEC issued the R ules for Access to Public Electronic Mobile Networks29, setting 
the conditions of operations of MVNOs in the country. Following this opening, the UK -based MVNO , 
Lycamobile , started operations in July 2016.  
                                                
25 For a detailed overview of this framework, see: https://ec.europa.eu/digital -single -
market/sites/digital -agenda/files/Copy%20of%20 Regulatory%20Framework%20for% 20Electonic%20 
Communications%202013%20NO%20CROPS.pdf . 
26 Official Gazette No s. 39/2014, 188/2014, 44/2015, 193/2015, 11/2018 , and 21/2018 . 
27 ITU. Country Profile of North Macedonia . Viewed at: https://www.itu.int/net4/itu -
d/icteye/CountryProfile.aspx . 
28 Viewed at: https://www.budde.com.au/Research/Macedonia -Telecoms -Mobile -and-Broadband -
Statistics -and-Analyses . 
29 Official Gazette No. 94/2016 . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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During the period under review, only one complaint was lodged under the dispute settlement 
system for interconnection disputes among operators. The case was launched in 2018, and opposed 
Makedonski Telecom and One VIP regarding termination process issues.  
The criteria of significant market power are a mar ket share of 40% on the relevant market 
combined with the assessment of other factors. In a recent decision, applicable as of the first quarter 
of 2019, the AEC reduced the number of relevant markets susceptible to ex -ante regulation from 14 
to 6. The AEC actively imposes remedies on operators with significant market power, such as price 
control based on the Long -Run Average Incremental Cost (LRIC) method or ex ante price control; 
transparency, through the publication of Reference Interconnection Offers (RI Os) and of charges; 
terms and conditions; accounting separation; carrier selection and preselection; obligation of 
interconnection and access; and use of specific network elements.30 
The AEC also imposed a cost orientation model to the following services: f ixed 
interconnection and local loop unbundling; dark fibre and duct; wholesale mobile access and call -
originating services; and mobile call termination.  
Number portability was introduced in 2008, in terms of change of both geographic area and 
operator. Th e regulatory regime did not change. As at 30 June 2017, 215,811 mobile customers and 
173,986 fixed telephone customers had used that option.  
In 2013/2014, the two main operators started to deploy 4G/LTE networks. A National 
Broadband Operational Plan, pre pared by the Ministry of Information Society and Administration, is 
undergoing a process of public consultation. One chapter of this Plan deals with 5G. According to the 
Plan, frequencies in the 700 MHz band will be available after 30 June 2020. Frequencie s in the 3, 4 -
3, and 8 GHz bands are already available.  
The method of attribution of spectrum licences to operators is variable. From 2012 to 2014, 
nine allocations took place, six based on auctions, two on so -called "beauty contests" (i.e. 
comparative sel ection), and one on a first -come -first-served basis. The last version of the National 
Plan for frequency allocations dates from 2016. All frequencies are technology and service neutral, 
so every technology standardized by the European Telecommunication Sta ndards Institute (ETSI) 
can be used. Since 2014, no auctions took place; however, an auction of one licence for 2x15  MHz 
in the 2100 frequency band is planned.  
The licensing process is based on a general authorization regime, covering all publicly -
available electronic communications networks and services. Annual fees are based on annual 
revenues, and are progressive, ranging from 0.07% on annual revenues below MK D 1 million to 
0.35% on revenues above MKD 500 million; however, these fees cannot exceed EUR 250,000 per 
year.  
In terms of transparency, Article 105 of the Electronic Communication Law obliges the AEC, 
prior to the adoption of a regulation, to obtain and  take appropriate account of the opinion of 
interested parties, and to make them publicly available on its website.  
Regarding roaming fees, there are ongoing consultations, under Regional Cooperation 
Council (RCC) supervision, among six Western Balkans cou ntries, to abolish roaming fees between 
them.  
The universal service covers fixed -line private residential services, fixed -line public 
payphones, broadband and directory services. Broadband was added in 2017. The universal service 
is funded by a universal service fund, operational since 2006, and is based on a contribution by all 
operators of 0.35% of their total gross revenues. The fund is administered by the telecom regulator.  
                                                
30 For more elements on the various cases and the remedies imposed, see Cullen International Report 4 
– Supply of services in monitoring regulatory and market developments for electronic communications and 
information society services in Enlargement Countries , 2011 -2014, Annex, Cross -country comparative data, 
February 2014, pp .151-154. Viewed at: 
http://www.aek.mk/index.php?option=com_k2&view=item&id=1538:cullen -international -report -4-februa ry-
2014&Itemid=659&lang=en . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 4.4.2   Financial services  
4.4.2.1   Overview  
The financial services sector accounts for around 3.0% of GDP and 1.5% of employment 
(Box 4.2). These  shares remain broadly the same as at the time of the previous Review.  
Box 4.2 Financial services: statistical overview, 2013 and 2017  
Share of financial services in GDP  
2013: 2.8%  
2017: 3 .0% 
Share of financial services in total employment  
2013: 1.4%  
2017: 1.5%  
Financial services exports  
2013:  EUR 2.7 million  
2017: EUR 3.4 million  
 
Financial services imports  
2013: EUR 26.1 million  
2017: EUR 30.2 million  
Significance of the  financial services arm of the p ost office: t he post office does  not collect deposits  
Source:  Information provided by the authorities . 
North Macedonia's overall financial services policy is geared towards preparing the 
negotiation of adhesion to the European Union and, hence, towards transposing the EU acquis and 
adapting the country's institutions in that perspective. The 2018 EU Commiss ion staff document on 
the country31 considers that it remains moderately prepared regarding financial services. It 
acknowledges that some progress was made on the implementation of regulations and strengthening 
the enforcement capacity of financial market r egulators, but that consumer protection issues, in 
particular, should be addressed.  
The GATS financial services commitments of North Macedonia largely reflect those of the 
European Union.  
4.4.2.2   Banking services  
Box 4.3 below provides statistical indicators on  the banking sector during the period under 
review.  
Box 4.3 Statistical overview of the banking sector, 2013 and 2017 -18 
Number and types of banks , and recent consolidation s 
 
2013: 16 banks , of which  11 foreign -controlled banks, 1 state -owned bank, and 4 domestic private banks  
 
2018: 15 banks, of which 11 foreign -controlled banks (6 subsidiaries of foreign banks and 5 owned by non -
bank foreign shareholders ), 1 state -owned bank, and 3 domestic private banks  
 
Consolidation : in 2014 , one domestic bank was acquired by a foreign -controlled bank  
 
Banking network  
 
2013: 426 access points (branches and tellers) , employing 6 ,048 people  
 
2017: 427 access points (branches and tellers) , employing 5,929 people  
                                                
31 Commission Staff Working Document , The former Yugoslav Republic of Macedonia 2018 Report , SWD 
(218) 154 final, 17 April 2018, pp. 61 -62. Viewed at: https://eur -lex.europa.eu/legal -
content/EN/TXT/PDF/?uri=CELEX:52018SC0154&from=GA . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 Concentration/share of the various types of banks in the total balance sheet for banks  
 
2013:  foreign -controlled banks (68.3%);  domestic private bank s (27.9%); and state -owned banks (3.8 %) 
 
2018: foreign controlled banks (71%);  domestic private banks ( 26.6%); and state -owned bank (2.4%)  
 
Total balance sheet of the banking  sector  
 
2013:  MKD 369 billion (for eign-controlled banks: MKD 252.4 billion;  domestic private banks: MKD 102.6 
billion; state-owned bank s: MKD 14.0 billion ) 
 
2018: MKD 472.8 billion (forei gn-controlled banks: MKD 335.7 billion; domestic private banks: MKD 125.8 
billion; state -owned banks: MKD 11.3 billion ) 
Lending activities   
 
2013: MKD 230.1 billion (of which credits to non -residents: 0.4%)  
 
2018: MKD 303.0 billion  (of which credits to no n-residents: 0.1%)  
 
Six banks are mainly oriented to wards  lending to non -financial companies, five  mostly lend to households, 
three  equally finance the two sectors, while one places credits through the other banks (as the state -owned 
financial intermediary  for approved credit lines from international financial institutions).  
 
Non-performing loans (NPL):  
 
2013:11.5%  
 
2017: 6.3%  
Securities activities  (securities holding s in bank accounts)  
 
2013: MKD 62.4 billion  
 
2018: MKD 59.8 billion  
Source:  Information provided by the authorities . 
The Ministry of Finance is responsible for the coordination and strategic management of 
international financial, monetary and tax matters, while the National Bank (NBRM) is the sector's 
supervisor, notably in charge of monitori ng bank liquidity and overseeing payment and settlement 
systems. Competition issues are dealt with by the Commission for the Protection of Competition. 
There were no major changes to the regulatory framework on banking services during the period 
under revi ew. The most notable regulatory reform was a 2016 amendment to the Banking Law32, 
which incorporates the capital framework of Basel 3 requirements, the Basel Core Principles for 
Effective Banking Supervision, and the Basel Core Principles for Good Corporate  Governance. In 
order to further strengthen the stability of the banks in the country, the changes mainly refer to the 
introduction of the capital buffers, which enhances the capacity of banks to adequately manage the 
risks associated with their activities  and absorb the losses that could arise in their operational 
business.  
The main reform planned is the adoption, in 2020, of a special Law on Resolution, in order 
to transpose Directive 2014/59/EU on the establishment of a framework for recovery and resolu tion 
of credit institutions and investment firms. During the period under review, North Macedonia also 
adopted a series of by -laws, aimed at strengthening the institutional and operational framework of 
banks.33 
                                                
32 Official Gazette No. 190/16 . 
33 Notably: the Decision on amending the Decision on the methodology for determining the capital 
adequacy (Official Gazette No. 218/16) , the Decision on  the methodology for determining systemically 
important banks (Official Gazette No. 26/17), the Decision on the methodology for developing a recovery plan 
for systemically important banks (Official Gazette No. 26/17) , the Decision on the Methodology fo r Determining 
the Rate of the Countercyclical Capital Buffer for Exposures (Official Gazette No. 26/17) , the Decision on the 
methodology for determining maximum distributable amounts of earnings (Official Gazette No. 26/17), the 
Decision on the methodology  for managing leverage risk (Official Gazette No. 26/17), the Decision on the WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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North Macedonia also transposed of series of pieces of legislation of the EU banking acquis, 
notably: the single rule book of prudential requirements for banks capital liquidity and leverage 
(CRDIV -CRR) and the Regulation on Prevention, Management and Reso lution of Bank Crises (BRRD), 
and plans, in the medium term, to transpose the Money Market Funds Regulation on Shadow 
Banking. Regarding banks and financial conglomerates, the 2018 EU Commission staff document on 
the country34 considers that, whereas the im plementation of the Capital Requirements Directive IV 
package has started, notably regarding capital adequacy standards, the legislation does not yet 
designate a bank resolution authority. It also acknowledges that strong policy measures by the 
Central Ban k in 2015 were crucial in preserving the banking sector's stability. It notes that, 
concerning the financial market infrastructure, a reserve guarantee fund for small interbank 
payments was established, and that these reserves are sufficient to settle the possible daily negative 
net exposure of banks. While the rules by the Central Securities Depositary prescribe when 
transactions are final and irrevocable, their alignment with the Settlement Finality Directive is yet to 
be finalized. Alignment with the Fin ancial Collateral Directive remains, however, incomplete.  
Regarding the licensing of new banks, in addition to the standard prudential criteria 
applicable to local banks, foreign banks and/or foreign entities with participation in a foreign bank 
that inten d to acquire control in a bank should submit to the National Bank additional documentation. 
These include: (a) a certificate from the registry of the head office of the foreign bank and/or foreign 
person who has a participation in a foreign bank; (b) proof  that the foreign bank is authorized to 
collect deposits and other repayable sources of funds in the country of registration of the bank's 
head office; (c) an opinion of the competent authorities in the country in which the head office of 
the foreign bank is registered, relating to the acquiring control in the bank; and (d) evidence that 
the competent authority of the foreign bank exercises adequate supervision on a consolidated basis, 
at least in a method and volume specified by banking laws.  
The statutor y maximum delay to process licence applications is 180 days for temporary 
licences and 90 days for licences for founding and operating banks, with an interim period of 180 
days for the fulfilment of all requirements stipulated in the banking law necessary for issuance of 
the licence for founding and operating a bank. There is no limitation on the duration of the licence if 
the criteria are fulfilled. It is not possible to sell the bank licence, or to dispose of it. Only the 
Governor of the National Bank may  withdraw a banking licence and initiate bankruptcy or liquidation 
procedures (including voluntary liquidation). The minimum initial capital requirement to obtain a 
licence is MKD 310 million (EUR 5 million).  
There is no administrative allocation of financ ial resources, and the determination of interest 
rates and fees are market -based.  
North Macedonia has a bank deposit insurance scheme. It was instituted by the Law on 
Deposit Insurance Fund, 2000, last amended in 2010.35 The scheme is managed by the Deposi t 
Insurance Fund. It covers deposits of resident and non -resident households (natural persons), kept 
at a bank, foreign -bank branch or a saving house of the following types: transaction accounts; denar 
and foreign currency deposits; certificates of deposit ; payment card deposits; and foreign currency 
inflows belonging to natural persons. The maximum amount insured is EUR 30,000 (in MKD 
equivalent) for a deposit in a bank, foreign -bank branch or savings house. The reimbursed amount 
is comprised of the princi pal deposit and of the interest calculated to the day the risk event occurred. 
The resources of the Fund are composed of the founding capital, the collection of deposit insurance 
premiums, and the revenues from investments. The resources of the Fund are in vested in securities 
issued by the State and the National Bank, with maturity of up to 12 months from the date of 
purchase, and debt securities issued by foreign countries, central banks or public international 
financial institutions. These securities must  be rated by at least two internationally -acknowledged 
credit risk assessment agencies, in one of the highest categories, up to the level of the insured 
foreign currency deposits.  
                                                
methodology for credit risk  management - which shall apply as of 1 July 2019 (Official Gazette No. 149/18), 
and the Decision on good corporate governance rules for banks (Official Gazette No. 24/18) . 
34 Commission Staff Working Document, The former Yugoslav Republic of Macedonia 2018 Report , SWD 
(218) 154 final , 17 April 20 18, p. 62.  Viewed at: https://eur -lex.europa.eu/legal -
content/EN/TXT/PDF/?uri=CELEX:52018SC0154&from=GA . 
35 Official Gazette No s. 63/2000, 29/2002, 43/2002, 49/2003, 81/2008 , and 158/2010 . A consolidated 
English version of the text can be viewed at: 
https://www.finance.gov.mk/files/u11/Law%20on%20Deposit%20Insurance%2 0eng.pdf . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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As part of the Financial Sector Assessment Programme (FSAP), during 2018, th e IMF and 
World Bank conducted a detailed assessment of the North Macedonian banking sector compliance 
with the Basel Core Principles. Their conclusion w as that the legislative base was strong and 
comprehensive, and the supervisory approach risk -based and supported by a well -developed 
supervisory regime. The highest grade - Compliant (C) - was given for 21 core principles, and Largely 
Compliant (LC), the second highest grade, for 8. As a consequence, North Macedonian banks now 
have a minimum level of capita l adequacy ratio of 8%, a rate of core capital of 6%, and a rate of 
regular core capital of 4.5%. In addition, and apart from the internal capital requirements, all banks 
abide by the obligation to maintain a capital conservation buffer of 2.5% of the risk -weighted assets. 
Moreover, seven banks, designated by the National Bank as systemically important banks, abide by 
the additional requirement of a protective layer of capital.  
According to the IMF staff concluding statement of the 2018 Article IV mission d ated 
19 November 2018, the banking system remains healthy, but risks need to be closely monitored, 
given underlying structural vulnerabilities. Banks are well -capitalized, liquid, and profitable. The 
share of NPLs has decreased, including due to NBRM -manda ted write -offs, credit risks are well -
provisioned, and banking supervision and regulations have been enhanced considerably over the 
past decade.  
The in -depth FSAP also found scope for further improvement, including by ensuring the 
operational independence  of the NBRM, boosting staffing levels, and intensifying supervision for 
systemically -important banks. The macro -prudential policy framework would benefit from further 
capacity building for systemic risk monitoring and enhanced inter -agency coordination, w hile 
ongoing efforts to modernize the crisis management and bank resolution regime should be promptly 
completed.  
During the period under review, the National Bank completed the implementation of the 
existing regime on anti -money laundering, consisting of Law No. 4/2008 of January 2008 and two 
2010 National Bank Decisions (Nos.  103/10 and 60/11). A new Decision on the Methodology on 
Managing the Money Laundering and Financing of Terrorism Risk (No. 78/18) became applicable as 
of 1 January 2019.  
In addition,  a new Law on Prevention of Money Laundering and Financing of Terrorism was 
adopted36, and became applicable in July 2018. The new Law harmonizes the anti -money laundering 
(AML) regime with EU Directive 2015/849. The new Decisions of the NBRM37 are based on the revised 
international AML standards (Financial Action Task Force recommendations and the EU Directive on 
AML), as is the revised NBRM regulation on corporate governance and risk management. The new 
Decision defines the inherent and aggregate level of A ML risk, as well as the criteria and procedures 
for its management. It mandates a risk -based approach.  
4.4.2.3   Insurance services  
Box 4.4 provides statistical indicators on the insurance sector during the period under 
review.  
Box 4.4 Statistical overview of the insurance sector, 2013 and 2017  
Insurance  
Number of insurance companies and recent consolidation s 
 
2013: 15 companies  
4 life, of which 4 branches of foreign -insurance companies,  zero reinsurance, z ero captive;   
11 non-life, of which 10 branches of foreign -insurance companies, 1 reinsurance , zero captive  
 
2017: 16 companies  
5 life, of which 5 branches of foreign -insurance companies, zero reinsurance , zero captive;  
11 non-life, of which 10 branches of foreign -insurance companies, 1 reinsurance , zero captive  
                                                
36 Official Gazette No. 120/18 . 
37 Official Gazette N os. 78/18 , and 241/18 . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 Total balanc e sheet of the insurance sector  
 
2013: EUR 226 million , of which life insurance: 19.12%;  non-life: 80.88%  
 
2017:  EUR 326 million , of which life insurance: 30.14%;  non-life: 69.86%  
Concentration  (cumulative marke t share of the top 5 companies)  
 
2013: l ife insurance : 100%;  non-life: 60.55%  
 
2017: life insurance : 100%;  non-life: 60.79%  
Source:  Information provided by the authorities.  
The Ministry of Finance, through its Financial Syst em Department, is responsible for defining 
the insurance sector's policy, while the Insurance Supervision Agency (ISA) is in charge of 
supervision of the sector. Competition issues are dealt with by the Commission for the Protection of 
Competition.  
The reg ulatory regime of insurance services is composed of: the Insurance Supervision Law, 
2002, last amended in 201838; the Law on Compulsory Automobile Insurance, 2005, last amended 
in 201539; and 38 secondary legislative acts (by -laws) adopted by the ISA regulating different 
supervisory issues (15 on licensing, 17 on supervision and statistics, and 6 on accounting and 
financial reporting).40 
North Macedonia transposed a series of pieces of legislation stemming from the EU insurance 
acquis, notably the Risk -based Prudential and Solvency Rules for Insurers Directive (so -called 
"solvency").  
North Macedonia did not conclude any preferential arrangements on insurance services. 
Regarding supervision issues, the ISA concluded 14 MoUs with foreign insurance supervis ory 
authorities, namely: Albania, Austria, Bulgaria, Croatia, Hungary, Kosovo, the Republic of Moldova, 
Montenegro, Poland, Romania, Serbia, Slovenia, the Slovak Republic, and Turkey.  
According to the Insurance Supervision Law, insurance activities may onl y be carried out by: 
(a) an insurance undertaking with its head office in North Macedonia, that holds a licence for carrying 
out insurance activities by the ISA; (b) a branch office of a foreign insurance undertaking that has 
been granted a licence for car rying out insurance activities by the ISA; or (c) an insurance 
undertaking from an EU member State that has established a branch office in the territory of North 
Macedonia or has been authorized to directly carry out insurance activities in the national te rritory.  
The insurance company can only be established as a joint stock company; no other legal 
forms are allowed. The minimum capital for establishing and operating an insurance company is:  
• EUR 2 million , if the company carries out insurance activities in certain specific classes 
of insurance in the group of non -life insurance;  
• EUR 3 million,  if the company carries out insurance activities in  all the classes of 
insurance in t he group of non -life insurance;  
• EUR 3 million,  if the company carries out life insurance activities;  and 
• EUR 4.5 million,  if the company carries out reinsurance activities.  
The applicant for a licen ce must submit a three -year business plan to the ISA. Information 
require d in this plan in cludes:  
• the business policy of the future company , with an analysis of the reasons for the 
establishment of the company, its business goals, an overview of the market where the 
company will be active, and the target groups  of customers ; 
                                                
38 Official Gazette N os. 27/2002, 98/2002, 79/2007, 88/2008, 67/2010, 44/2011, 112/2011, 188/2013, 
30/2014, 43/2014, 112/2014, 153/2015, 192/2015, 23/2016 , and 83/2018 . 
39 Official Gazette N os. 88/2005,70/2006, 81/2008, 47/2011, 135/2011, 112/2014 , and 145/2015.  
40 The English texts  of the laws and by -laws can be viewed  at: www.aso.mk . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 • the lines of insurance products planned;  
• its reinsurance  policy , including tables for maximum coverage for all lines of business 
insurance ;  
• a calculation of the required solvency margin ;  
• the planned amount of the costs for the establishment, organization al costs and 
development costs ; 
• a liquidity assessment and an indication of the sources of financing required to fulfil the 
obligations and provide the required level of solvency margin; a projection study on the 
expected business results for at least thre e years, primarily on the expected income 
from premiums, the expected claims, expenses for performing insurance, expected 
profit, and the amount of tec hnical and other provisions ;  
• a description of the management and internal control systems ;  
• the location  of the headquarters of the company, and the potential num ber and location 
of subsidiaries, branches, and other organizational forms, as well as the deadline when 
the company intends to open them ; 
• the organizational structure of the company , with a special  description of the scope of 
work and the responsibilities of persons with special rights and the responsibilities of 
each organizational unit, inter -relations and relations with the management and 
supervisory bodies of the company, and a description of th e required number of 
employees an d their qualifications; and  
• the specification of the assets available required to meet the non -monetary liabilities 
(assistance funds), if the insurance company intends to conduct travel -insurance 
activities . 
Life and non -life insurance licences are incompatible, except for in one case: a life insurance 
company can also provide complementary accident and health insurance. There is no limitation on 
the number of licences, and no differential treatment of foreigners in the lic ensing process.  The 
maximum processing time for applications is four months. There is no specified duration of validity 
for licences. The licence cannot be sold or disposed of.  No prior approval is needed for launching 
new insurance products or for changing the insurance policy terms and conditions. In such 
occurrences, the insurance companies are simply obliged to inform the ISA . 
4.4.2.4   Stock exchange and securities  
Box 4.5 below provides statistical indicators on the stock exchang e and securities sector 
during the period under review.  
Box 4.5 Statistical overview of the stock exchange and securities sector, 2013 and 2017  
Capitalization of the companies listed   
 
2013:  EUR 1.77 billion (i.e. the equivalent of 27.95% of GDP in the same year)  
 
2017: EUR 2.27 billion ( i.e. the equivalent of 17.66% of GDP in the same year)  
Gross value of publicly issued bonds  
 
In the period 2013 -17, there was only 1 issuance of corporate bonds, in 2017, of  a total value of EUR 1 million, 
by Kapital Banka JSC Skopje through  private placement for 3 institutional investors , 1 from Bulgaria (Alfa 
Bond EAD Sofia) and 2 from  North Macedonia (KB Publikum Balansiran and KB Publikum bonds).  
Securities turnover on the stock exchange (secondary market ) 
 
The turnover is generated from trading of domestic shares and of domestic bonds for denationalization, i.e. 
bonds issued by the Government to compensate for post -WWII nationalizations, that can be traded on the 
market .  
 
In 2013, the turnover of shares was EUR 40.75 million, while the turnover of bonds was EUR 11.84 million.  
 
In 2017, the turnover of shares was EUR 74.13 million, while the turnover of bonds was EUR 2.91 million  
Source:  Informat ion provided by the authorities.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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The supervisory authority and licensing organ for the stock market and securities is the 
Securities and Exchange Commission, and the Ministry of Finance is in charge of the overall strategy 
and policy.  
The licensing procedures for securities m arket participants (stock exchanges, the central 
securities depositary, brokerage houses, brokers, and investment advisors) are regulated by the 
Law on Securities, 2005, last amended in 201841, and the Law on Investment Funds, 201642 
Amendments to this Law, in order to transpose the UCITS IV EU Package, are being prepared, and 
their adoption by Parliament is expected in the first half of 2019. During the period under review, 
North Macedonia transposed various pieces of legislation stemming from the EU securit ies acquis, 
notably the Enhanced Framework for Securities Market (MIFID/R), the Enhanced Framework to 
Prevent Market Abuse (MAD/R), the Central Securities Depository Regulation, and the EU new rules 
on prospectuses. North Macedonia is also planning to tran spose, in the medium -term, the Hedge 
Funds and Private Equities Directive (AIFMD) and the Derivatives Regulation (EMIR).  
A foreign brokerage house, which is licensed to perform all or some services related to 
securities in any member country of the OECD, s hall be allowed to perform those services in the 
national territory through the establishment of a subsidiary which obtains a licence issued by the 
Securities and Exchange Commission.  
Similarly, the three types of foreign investment fund management compan ies (closed ended, 
open ended, and private funds) may offer units from managed investment funds in the national 
territory only through the establishment of a subsidiary which obtains a licence issued by the 
Securities and Exchange Commission.  
According to  the Law on Joint Stock Companies, a central security depositary can only be 
established as a joint stock company with its head office in North Macedonia. It may be established 
by brokerage houses, banks, insurance companies or fund management companies. I ts functions 
cannot be performed without a licence from the Securities Exchange Commission. The depositary 
must, at all times, hold and maintain a basic capital of at least EUR 500,000 (in MKD equivalent), 
from the date when the licence for founding the de positary is obtained.  
A broker can perform services related to the execution of client orders, informing clients of 
the purchase or sale of securities, within a brokerage house only after having obtained a licence 
from the Securities Exchange Commission te stifying the passing of an ad hoc professional exam. A 
broker licence is valid for a period of five years, and each broker is required to renew the licence 
every five years.  
An investment advisor can perform services only after having obtained a licence f rom the 
Securities Exchange Commission testifying the passing of an ad hoc professional exam for 
investment advisors. The licence is valid for a period of five years. The investment advisor is required 
to renew the licence every five years.  
There are no l imitations regarding the number of licences or participations of natural persons 
or legal entities in the buying and selling of securities on the stock exchange.  
Stock exchanges under foreign law cannot offer any services in the territory of North 
Macedoni a through any legal form.  
4.4.2.5   Pension funds  
The legal framework of the pension fund regime consists of  the Law on Mandatory  Fully-
Funded  Pension  Insurance , 2002,  last amended  in 201843; the Law on Voluntary  Fully-Funded  
                                                
41 Law on Securities (Official Gazette No s. 95/2005, 25/2007 , 07/2008 , 57/2010 , 135/2011, 13/2013, 
188/2013, 43/2014, 15/2015, 154/2015 , and 23/2016). Viewed at: 
https://www.finance.gov.mk/files/u11/LAW%20ON%20SECURITIES -final.pdf . 
42 Official Gazette No s. 12/2009, 67/2010, 24/2011, 188/13, 145/15 , and 23/16.  
43 Official Gazette N os.29/2002, 85/2003, 40/2004, 113/2005, 29/2007, 88/2008, 48/2 009, 50/2010, 
171/2010, 36/201 1, 98/2012, 13/2013, 164/2013, 44/2014, 192/2015, 30/2016 , and 21 /2018 . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 Pension  Insurance , 2008, last amen ded in 201344; the Law on Payment  of Pensions  and Pension  
Benefits  from Fully-Funded  Pension s45, 2012;  and about  50 by-laws.46  
The pension system has a three -pillar structure , composed of :  
• a generational solidarity –based public pension insurance pillar, based  on defined benefit s, 
which therefore falls outside of the scope of the GATS;  
• a mandatory fully -funded pensi on insurance pillar, based on  defined contribution s; and  
• a voluntary fully -funded pension insurance pillar,  based on defined contribution s. 
This structure results from a thorough reform of the pension system that took place in 2000. 
In the second and third  pillars, each member has his/her individual account, in which the assets are 
recorded, and which provides the base for the future pension benefit, based on the amount of paid -
in contributions. The total assets of the mandatory and voluntary pension funds represented around 
9.4% of GDP in 2017.  
Box 4.6 below provides statistical indicators regarding the private pension fund sector 
(second and third pillars) during the period under review.  
Box 4.6 Statistical overview of the pension sector, 2013 and 2017  
Number of pension funds   
2 mandatory pension funds (since 2006 ) and 2 voluntary pension funds (since 2009)  
 
Total assets  
 
2013: MKD 27 million  
 
2017: MKD 66 million 
Source:  Informat ion provided by the authorities.  
The Agency for Supervision of Fully -Funded Pension Insurance (MAPAS) is the regulatory 
and supervisory body for private pension funds. It is a legal entity and an independent agency. The 
Chairman and the four members of the Council of E xperts of the Agency are appointed and revoked 
by Parliament, upon proposal by the Government. The Chairman of the Council of Experts manages 
the Agency, and represents it. The MAPAS is accountable to Parliament. It must submit an Annual 
Report on the Oper ation of the Agency, and a Financial Plan of the Agency for the following year, to 
Parliament for adoption. The MAPAS is funded by a levy on contributions to the second and third 
pillars, of 0.8%. It is paid by the pension management companies from their r evenue.  
The regulatory framework allows the establishment of three types of pension companies: 
joint pension company i.e. operating on the two pillars, mandatory pension company, and voluntary 
pension company. So far, only two companies have been establish ed, and they both belong to the 
joint pension category. One of them, NLB, is 100% -owned by Slovenian interests, while the second, 
KB First, is 51% Slovenian -owned and 49% owned by a local North Macedonian bank, K Bank. A 
third new licence was to be granted  in April 2019, again to a Slovenian company.  
There are no GATS type restrictions on foreign companies, except for non -discriminatory 
compulsory legal forms and for non -discriminatory requirements on shareholders imposing that at 
least 51% of the capital must be in the hands of the founding financial institution, which can be local 
or foreign.  
                                                
44 Official G azette  Nos. 7/2008 , 124/2010, 17/2011 , and 13/2013 . 
45 Official G azette Nos. 11/2012, 147/2015 , and 30/2016 . 
46 For an overview of these laws and regulations, see: http://mapas.mk/?page_id=1170  and 
http://mapas.mk/mapas -en/index.php/regulation . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 4.4.3   Transport services  
4.4.3.1   Transport infrastructure challenges and policy  
The economic development of North Macedonia, as a small land -locked country, depends, to 
a large e xtent, on a well -developed transport network. To reduce transport costs arising from the 
relatively poor condition of roads and railways, the Government is focused on the development of 
the transport infrastructure. Its aim is to better connect with EU mar kets and access to nearby sea 
ports in Greece and Bulgaria.  
In that respect, road infrastructure is a priority, since most goods, including exports, are 
transported by road (in the period 2006 -16, the intermodal share of road freight transport in the 
total freight transport was, on average, over 91.7%, while the railway share stood at 8.2%)47. The 
road network has a total of 14,182  km, of which 242 km is highways.  
The situation is similar for passenger traffic: road transport is the dominant mode for 
interc ity travel, followed by the rail network. Both the road and the rail network suffer from border 
crossing delays, linked partly to physical bottlenecks and to trade facilitation issues.  
The most important multimodal transport corridors in North Macedonia a re the Pan -European 
Corridor X, extending from north to south across the country (from the border with Serbia to the 
border with Greece) and the Pan -European Corridor VIII, extending from east to west, connecting 
the port of Durres in Albania with the port s of Burgas and Varna on the Black Sea in Bulgaria.  
With the construction of the Demir Kapija -Smokvica section, that ended in April 2018, a 
highway now runs along the entire Corridor X, which is 172 km long. Regarding railways, Corridor X 
will be fully op erational by the end of 2019, when the network will be upgraded and full connection 
with the Greek and Serbian networks will be completed.  
So far, only 37% of Corridor VIII has been upgraded to highway level, and works continue 
westwards. The rail connect ion with the Bulgarian network has not yet been completed. The 
construction of the eastern part of the rail Corridor VIII (89 km) is expected to be completed and to 
become operational by the end of 2030.  
Table 4.22 describes the budget and the sources of f inancing allocated to these projects.  
Table 4.22 Main transport infrastructure projects' budgets and sources of financing  
Project  Budget and source of financing  
Rail transport projects  
Renovation of Rail Corridor X  EUR 17.6 million loan from the European Bank for 
Reconstruction and Development (EBRD) , obtained in 2010  
Rail Corridor VIII,  
Kumanovo -Beljakovce  section  For the preparation of the plans : EUR 1.5 million loan from the 
Western Balkans Infrastructure Fund (WBIF)a 
 
For the works : EUR 46.4 million from a n EBRD loan  
 
For supervision services : EUR 2.7 million from a WBIF loan  
Rail Corridor VIII,  
Beljakovce -Kriva Palanka section  For the preparation of the plans : EUR 2.7 million from a WBIF 
loan  
 
For the works : EUR 70 million from an EBRD/WBIF loan 
obtained in 2018   
 
For supervision services : EUR 2.7 million from WBIF technical 
assistance grant funds supported by the EBRD  
                                                
47 The remainder is ensured by pipe line transport . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 Project  Budget and source of financing  
Rail Corridor VIII,  
Kriva Palanka -Deva Bair section,  
on the b order with Bulgaria  For preparation of the pans: EUR 3.2 million from EU Instrument 
for Pre -Accession Assistance (IPA) funds  
 
For works : EUR 60 million from IPA funds  
 
The remaining necessary funding , estimated at EUR 405 mill ion, 
is planned to be secured through the European Investment Bank 
and the  EBRD  
Road transport pr ojects  
Corridor VIII  
Highway construction  
Kicevo - Ohrid section  Financed by:  
- EUR 411 million loan from the Chinese EXIM BANK ;  
- the budget of Public Enterprise for State Roads  (PESR) ; and  
- the national budget  
Corridor VIII  
Expressway construction  
Rankovce – Kriva Palanka section  - EUR 58.1 million from a World Bank loan  
Corridor VIII  
Reconstruction and rehabilitation  
Kriva Palanka -Deve Bair  section EUR 12 million  
Corridor VIII  
Rehabilitation  
Kumanovo -Stracin  section  EUR 16 million financed by : 
- EU IPA funds ; 
- the budget of the PESR; and  
- the national budget  
Corridor VIII  
Highway rehabilitation  
Miladinovci -Hipodrom  section  EUR 4 million   
Corridor VIII  
Highway rehabilitation  
Kumanovo -Miladinovci  section  (finished)  EUR 12.7 million from EU IPA funds  
a An ad hoc  financial institution co -financed by the European Union, 20 bilateral donors, the EBRD, the 
European Investment Bank , and the Council of Europe Development Bank (CEB).  
Source:  Information provided by the authorities.  
The development of the road and railway infrastructure will be complemented by the 
implementation of trade facilitation measures, such as the institution of  one-stop border -crossing 
procedures.  
The long -term transport policy of North Macedonia is defined in the National Transport 
Strategy 2018 -30, adopted by the Government in December 2018. Its main aims are to improve the 
economic efficiency, safety and acce ssibility of transport, to handle its environmental impact 
management, and to ensure the integration of transport with other sectoral policies. Its specific 
objective is to address the weaknesses of the transport sector at regional and national levels.  
On 22 December 2017, Parliament ratified the Treaty establishing the Transport Community 
(TCT), which regroups the European Union on the one hand and the Western Balkan countries on 
the other. Its aim is to create a Transport Community in the field of road, rail, inland waterway and 
maritime transport, and to develop the transport network between them. This will be undertaken on 
the basis of the relevant EU acquis, including in the areas of technical standards, interoperability, 
safety, security, traffic mana gement, social policy, public procurement, and environment, for all 
modes of transport excluding air.  
The Secretariat of the Transport Community is expected to be fully operational by end -2019.  
4.4.3.2   Road transport services  
Being a landlocked country with a rela tively modest railway network, North  Macedonia is 
heavily dependent on road transport. Table 4.23 details the passenger and cargo road traffic, while 
Table 4.24 describes the present state of the national fleet of trucks, buses and coaches.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 Table 4.23 Road freight and passenger traffic, 2013 -17 
 2013  2014  2015  2016  2017  
Road cargo traffic for hire and reward 
(million t/km)  6,667  8,771  8,361  8,780  8,420  
Road passenger traffic , by bus and by coach 
(million t/km)  1,980  2,474  2,276  2,069  2,331  
Source:  International Transport Forum (ITF)/OECD.  
No detailed statistical data was available regarding the size and structure of the fleet at the 
beginning of period but, according to the authorities, the size of fleet grew significantly, and its 
technical and environmental quality improved during the period under review. Table 4.2 4 details the 
present size and structure of the fleet, by environmental performance category.  
Table 4.24 Trucks (over 3.5 t) and coach fleets, 2017  
 Truck fleet (by environmental Euro Safe categor ya) Bus and 
coach  fleets  Euro 0  Euro 1  Euro 2  Euro 3  Euro 4  Euro 5  Euro 6  Total 
trucks  
2017  2,942  11 282 1,307 396 2,709  1,955  9,602  4,093  
a Euro Safe categories correspond to successive environmental standards of an increasingly stringent 
nature. For more details on these categories, see WTO document S/C/W/324, pg. 36.  
Source:  Information provided by the authorities.  
The Ministry of Transport and C ommunications (MTC) is in charge of creating and 
implementing the country's transport policy, including national strategies and action plans, 
inspection, and enforcement. It is assisted by the Transport Inspectorate, an administratively and 
financially aut onomous body, which is responsible for supervising the implementation of relevant 
laws and rules. The P ublic Enterprise for State Roads (PESR)  is responsible for designing and 
implementing the annual programme for planning, funding, construction, reconstru ction, 
maintenance, and protection of the national and regional road network.  
North Macedonia transposed in its Law on Road Transport, 201348 the main regulations 
underpinning the single EU road transport market, namely EU Regulation Nos. 1071/09 on access 
to the occupation of road transport operator, 1072/09/EC on common rules for access to the 
international road haulage market, 1073/09/EC on common rules for access to the international 
market for coach and bus services, and earlier EU liberalization legisl ation such as Regulation 
56/83/EEC concerning the implementation of the Agreement on the International Carriage of 
Passengers by Road by means of Occasional Coach and Bus Services (ASOR). However, cabotage is 
not yet allowed for EU freight hauliers but wil l soon be open for occasional passenger transports via 
the upcoming ratification of the Interbus Agreement. North Macedonia also transposed a series of 
EU technical requirements on vehicles and the qualifications of drivers49, and will soon transpose the 
latest EU tachymeter requirements.  
North Macedonia concluded 33 bilateral agreements on the international road transport of 
passengers and goods with the following countries: Albania, Austria, Bulgaria, Belgium, Belarus, 
Bosnia and Herzegovina, Croatia, the  Czech Republic, Denmark, Estonia, France, Germany, Greece, 
Hungary,  Iran, Italy, Latvia, Luxembourg, the Republic of Moldova, Montenegro, the Netherlands, 
Norway, Poland, the Russian Federation, Serbia, Slovenia, Turkey, Ukraine, Romania, Switzerland, 
Spain, the Slovak Republic, and the United Kingdom.  
Table 4.25 provides the detail of the permit quotas negotiated by North Macedonia with its 
bilateral partners, by type of environmental category of vehicles (undifferentiated/ordinary or Euro  
                                                
48 Official Gazette No. 23/13.  
49 Notably , Directive 96/96/EC on the approximation of the laws of the member States relating to 
roadworthiness tests for motor vehicles and their trailers , Directive 2000/30/EC on the technical roadside 
inspection of the roadworthiness of commercial vehicles circulating in the Community,  Directive 84/647/EEC on 
the use of vehicles hired without drivers for the carriage of goods by road,  Directive 59/03/EC on the initial 
qualification and periodic  training of drivers of certain road vehicles for the carriage of goods or passengers , 
and Directive 94/06/EC on the establishment of common rules for certain types of carriage of goods by road  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 Safe 3 to 6) and by type of traffic (undifferentiated/universal, bilateral, transit third country, or a 
combination thereof).  
Table 4.25 Road transport quotas/permits negotiated by North Macedonia  Country  
Environmental 
category  
Type of 
geographical 
traffic  
Number of 
permits  
Country  
Environmental 
category  
Type of 
geographical 
traffic  
Number of 
permits  
Austria  Euro 3  Universal  800 Greece   B/Transit  Liberalized   
Euro 4  Universal  1,000    TC Via EMCTa 
quotas  
 Euro 5  Universal  4,200  Hungary   Bilateral / 
Transit/TC  Fully 
liberalized  
 Euro 6  Universal  700 Iran  Ordinary  B/Transit  1,000  
 Euro 3  Bilateral  300 Italy  Ordinary  Bilateral  950 
 Euro 4  Bilateral  700  Euro 3  Bilateral  2,000  
     Euro 5  Bilateral  1,900  
 Euro 5  Bilateral  1,500  Latvia  Ordinary  TC 194 
 Euro 6  Bilateral  500 Lithuania  Ordinary  B/Transit  1,000  
Albania   B/Transit  Fully 
liberalized  Luxembourg  Bilateral/  
Transit/TC  Fully 
liberalized  Bilateral/  
Transit/TC  
 Ordinary  TC 200 Republic of 
Moldova  Ordinary  TC 100 
Belarus  Ordinary  TC 300  Ordinary  B/Transit  300 
 Ordinary  B/Transit  2,200  Montenegro  Ordinary  TC 500 
Belgium  Ordinary  Universal  1,500    B/Transit  Fully 
liberalized  
Bosnia and 
Herzegovina   Bilateral/  
Transit/TC  Fully 
liberalized  Netherlands  Ordinary  Universal  2,000  
Bulgaria  Ordinary  TC 1,110  Norway  Ordinary  B/Transit  200 
  B/Transit  Fully 
liberalized  Poland   Bilateral/  
Transit/TC  Fully 
liberalized  
Croatia  Ordinary  TC 500 Romania  Ordinary  B/Transit  3,850  
  B/Transit  Fully 
liberalized   Euro 3  B/Transit  1,000  
Denmark  Ordinary  B/Transit  800  Ordinary  TC 500 
 Ordinary  TC 145 Russian 
Federation  Ordinary  B/Transit  2,500  
Estonia  Ordinary  Universal  100  Ordinary  TC 100 
France  Euro 4  B/Transit  500 Serbia  Ordinary  Bilateral  5,000  
 Euro 5  B/Transit  2,500   Ordinary  TC 300 
 Euro 5 
annual  B/Transit  20 Slovak 
Republic    Bilateral/  
Transit/TC  
 Ordinary  TC 200 Slovenia  Ordinary  TC 1,200  
Germany  Ordinary  B/Transit  100   B/Transit  Fully 
liberalized  
 Euro 3  B/Transit  2,000  Spain  Ordinary  TC 1,200  
 Euro 4  B/Transit  1,000  Switzerland  Ordinary  Unilateral  750 
 Euro 5  B/Transit  4,700  Turkey  Ordinary  Bilateral  3,150  
 Euro 6  B/Transit  1,000   Ordinary  TC 1,300  
 Euro 4  B/Transit  10 Ukraine  Euro 2  B/Transit  700 
 Euro 5 
annual  B/Transit  50  Euro 3  B/Transit  800 
 Euro 6  B/Transit  5  Euro 5  B/Transit  100 
 Euro 4  TC 150  Ordinary  TC 340 
 Euro 5  TC 380 United 
Kingdom   Bilateral / 
Transit /TC Fully 
liberalized  
 Euro 6  TC 50     
a EMCT: European Council of Ministers of Transport. For a detailed explanation of this pan -European 
plurilateral quotas system, see WTO document S/C/W/324, 29 October 2010, pages 35 -37. 
Note:  Euro 1 to Euro 6: permits granted to tracks belonging to Euro S afe (Euro) environmental categories 
1 to 6; O: ordinary, i.e. with no environmental category specified; U: universal , i.e. usable for any 
type of geographical traffic: bilateral, transit , or to and from third countries; B/T: permits usable 
indifferently for bilateral or for transit traffic; TC: third country  traffic.  
Source:  Information provided by the authorities.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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The multilateral quotas assigned to North  Macedonia under the pan -European ECMT 
agreement are described in Box 4.7.  
Box 4.7 ECMT multilateral quotas for North Macedonia, 2019  
 Licences (quantity)  Reserve licences (quantity)  
Annual licen ces   
Euro V  240  
369 
Euro VI  1,236  
Short term licen ces   
Euro V  840  
78 Euro VI  720 
Source:  ITF/OECD.  
North Macedonia undertook  GATS commitment s for two auxiliary services  to road  transport , 
namely storage and warehouse services , and freight transport agency services. These commitments 
are partial for market access (mode 2: none , but modes 1 and 3: unbound) and full for national 
treatment (modes 1,  2, and 3: none).  
4.4.3.3   Rail transport services  
North  Macedonia has a rail network of 699 km of wide gauge (1,435 mm), of which 312 km 
are electrified. Table 4.26 details the passenger and cargo traffic on this network for 2015 -18.  
Table 4.26 Passenger and cargo traffic on the rail network, 2013 -18 
  2013  2014  2015  2016  2017  2018  
Passenger traffic (million passengers/km)  
of which:  80.1 
 80.0 
 177.5  
 82.9 
 59.1 
 63.2 
 
- international  0.6 0.8 0.6 0.2 0.4 0.5 
- domestic  79.6 79.2 176.8  82.7 58.7 62.8 
Cargo traffic (million t/km)  
of which:  420.9  411.3  278.2  222.0  276.6  307.2  
- international  415.5  409.5  275.9  219.5  274.4  305.7  
- domestic  5.4 1.8 2.3 2.5 2.2 1.4 
Source:  Information provided by the authorities.  
In August 2007, the former railway company was split vertically into two companies: a 
company managing the infrastructure (PE MR Infrastructure), and a transport company/railway 
(MZ Transport JSC). The separation model adopted is of Type 150, i.e. where the shares are owned 
in both instances and at 100% by the State. Both companies have separate accounts, and are fully 
independent from each other for their decision –making process and budget. The Infrastructure 
Manager is in charge of all inf rastructure management functions (including capacity allocation and 
charging). Both companies are supervised by the Regulatory Agency of the Railway Sector, which is 
a separate entity, established by the Parliament, and by the directorate for safety of the  railway 
system (National Safety Authority), which is also a separate body established under the MTC.  
The Law on the Railways System transposed Regulation 1370/2007 laying down the 
conditions under which compensation payments stipulated in public service c ontracts and 
concessions for public service obligations in public passenger transport service shall be deemed 
compatible with the rules of the internal market in the European Union and exempt from prior state 
aid notification. The Government supports part of the losses in the passenger services, as a  
                                                
50 This model is s imilar to the one adopted by the Czech Republ ic, Denmark,  Estonia,  Finland,  Greece,  
the Netherlands,  Portugal,  Romania,  Slovakia,  Spain,  Sweden,  and the United Kingdom ( excluding Northern 
Ireland) . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 compensation of the Public Services Obligations (PSO) , based on a three -year rolling contract with 
MZ Transport JSC.  
With regard to the improvement of the railway infrastructure, the Infrastructure Manager 
proposes to the Government an Annual Programme, which is published in the Official Gazette. The 
Government secures funds for that purpose on an annual basis. At the end of each year, the 
Infrastructure Manager submits, through the MTC, a report to the Governme nt on the realization of 
the Programme.  
North Macedonia is in the process of transposing the EU Fourth Railways Package of 2016. 
Neither freight nor passenger transport have yet been liberalized. However, the process of business 
segmentation between freigh t and passengers has started, and so has the planification of the 
privatization of MZ Transport JSC. Based on the results of the analyses performed by a consultant, 
the Government will take a decision in the course of 2019 on the further opening of the rai lway 
market.  
North Macedonia undertook GATS commitments for two auxiliary services to rail transport, 
namely storage and warehouse services, and freight transport agency services. These commitments 
are partial for market access (mode 2: none, but modes 1 and 3: unbound) and full for national 
treatment (modes 1,  2, and 3: none).  
4.4.3.4   Air transport services  
The MTC, through its Aviation Department, carries out the following responsibilities in the 
field of aviation: drafting the national strategy for developing  aviation; implementing the policy of 
the Government in the field of aviation; proposing laws in the field of aviation and preparing and 
adopting by -laws; granting concessions in the field of aviation and transposing EU and international 
regulations.  
The C ivil Aviation Agency is an independent state body that functions as an autonomous 
legal entity. It exerts regulatory functions for the daily air policing regulation, while its former 
activities of air navigation services provider were spun off by the Aviat ion Law in 2009 to a new joint 
stock company, the 100% state -owned M -NAV AD Skopje. Under the same Law, another 100% 
state-owned airport joint stock company was created.  
Regarding the regulatory regime of the three auxiliary services to air transport cove red by 
the GATS, aircraft repair and maintenance, selling and marketing of air transport services, and 
Computer Reservation Services (CRS), North Macedonia undertook GATS commitments and MFN 
exemptions that echo those of the European Union in the perspecti ve of its adhesion process.  
It undertook full commitments for aircraft repair and maintenance (except for mode 1 cross -
border, which was considered as technically unfeasible at the time of the 1993 EU commitments). 
However, in practice, the country does no t have any aircraft maintenance provider certified by the 
two main safety regulatory agencies, the European Union's EASA and the United States' FAA, 
presently operating in its territory. If such an operator is established, it would have to follow the 
acqui s on air safety, EU Regulation No. 1321/2014 of 26 November 2014 on the continuing 
airworthiness of aircraft and aeronautical products, parts and appliances, and on the approval of 
organizations and personnel involved in these tasks, which has already been  transposed.51 
Regarding selling and marketing, North Macedonia undertook full market access 
commitments, while modes 1 and 3 remain unbound for national treatment. There is no specific 
national regulation for this type of service. In some of the air servic es agreements, there are 
provisions regarding commercial opportunities for foreign airlines. In practice, any foreign airline is 
free to sell or market its services, either via a physical presence or online.  
The commitments for CRSs are identical to those for selling and marketing: full for market 
access, and unbound for modes 1 and 3 for national treatment. This is to allow the interplay of the 
MFN exemption covering the EU CRS legislation (EU Regulation No.  2299/89, as amended by  
                                                
51 For the full text of the EU Regulation No. 1321/2014, see:  https://eur -lex.europa.eu/legal -
content/EN/TXT/PDF/?uri=OJ:L:2014:362:FULL&from=EN . WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 Regulation Nos. 3089/93 and 323/99) that was transposed in the Law on Contractual Relations in 
the Field of Aviation Transport . There is no monopoly granted.  
In practice, travel agents and airlines are free to use the CRS of their ch oice. There is no 
information available on which providers are effectively operating in the national territory.  
North Macedonia has two international airports, in Skopje and in Ohrid. Table  4.27 provides 
the total passenger and cargo traffic handled by the se airports.  
Table 4.27 Cargo and passenger traffic, 2013 -18 
 2013  2014  2015  2016  2017  2018  
Number of passengers (departed and arrived ) 
handled by the airport system (million)  1.07 1.28  1.56 1.79 2.03 2.34 
Total carg o handled by the airport system (tonnes)  2,701  3,589 2,786 3,090 3,002 3649 
Source:  Information provided by the authorities.  
For both airports, concessions were awarded, as of 2010, for 20 years to the Turkish 
company TAV Holdings; ground handling services are provided by TAV. Since EU Directive No. 96/67 
was transposed, and since Skopje airport reached the threshold of 2 million passengers per year, 
freedom of self -handling, mutual handling and third -party handling are legally available.  
Slots are regulated by the national regulation for slots allocation that transposes the EU 
acquis.52  
National rules for the establishment of an airline (issuing the Operating Licence and the 
Airline Operating Certificate) transpose the relevant EU regulatio ns53. Since the demise of the carrier 
MAT in 2009, North Macedonia does not have a national airline anymore.  
There is no specific cargo flight policy, except in the bilateral agreement with the United 
States that grants seventh freedom for cargo traffic. Th ere is no specific policy limiting the number 
of charters allowed to land.  
According to the authorities, no limitations apply to the operation of low -cost carriers. Their 
operations benefit from subsidy schemes. The first such scheme was launched in 2012,  for three 
years, and the subsidy was allocated through a tender won by Wizzair (a Hungarian low -cost carrier), 
which, in exchange for the subsidy, opened six new routes. In December 2014, EUR 5 million was 
earmarked for a new subsidy scheme. Wizzair again  won the tender in 2015, and created five new 
lines from Skopje (to Barcelona, Oslo, Nuremberg, Hamburg, and Friedrichshafen) and 1 from Ohrid: 
Basel -Mulhouse. The present subsidy scheme comprises a lump sum of EUR 40,000 for each new 
destination launched,  and an additional sum of EUR 13 for each departing passenger in the first year 
of operation, decreasing to EUR 12 in the second year, and to EUR 11 in the third.  
Table 4.28 describes the main features of the bilateral and plurilateral air services 
agreem ents of North Macedonia, analysed according to the WTO Quantitative Air Services Agreement 
Review ( QUASAR ) methodology.54  
                                                
52 Regulation No. 95/93, as amended by EU Regulation Nos. 894/2002, 1554/2003, 793/2004 , and 
545/2009 . 
53 EU Regulation Nos. 1008/2008,  690/2009, 1108/2009, 3922/91, 2176/96, 169/1999, 2871/2000, 
1592/2002, 1899/20 06, 1900/2006, 8/2008, and 859/2008.  
54 For more elements on this methodology, see WTO document S/C/W/270/Add.1, 30 November 2006.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 Table 4.28 Air transport agreements  Partner  
Date 
Entry into 
force  
Phase  
5th 
7th 
Cabotage 
Coop 
Designation 
Withholding 
Pricing 
Capacity 
Stat 
ALI 
European 
Common 
Aviation Area 
(European 
Union, Albania, 
Bosnia and 
Herzegovina, 
Serbia, 
Montenegro, 
Kosovo, 
Iceland, and 
Norway )  09.06.2006 
(with 
provisional 
application)  
 01.12.2017  I N N N N M CoI 
 FP FD N 24 
II Y N N N M CoI FP FD N 30 
 
Final  
Y  
Y  
Y  
N  
M  
CoI  
FP  
FD  
N  
43 
Israel  25.05.1999  30.06.2003   N N N N S SOEC  DA PD Y 0 
Qatar  17.10.2011  07.03.2012   Y N N Y M PPoB  FP FD Y 26 
Russia n 
Federation  22.03.2001  No data        SOEC      
Serbia  04.09.1996    N N N N M SOEC  DA PD Y 4 
Switzerland  18.09.1996    Y N N N S SOEC  DA PD Y 6 
Turkey  09.12.1994    Y N N N M SOEC  FP B1 Y 22 
United Arab 
Emirates  28.06.2016  Not entered 
into force   Y N N Y M PPoB FP FD Y 34 
United States  23.08.2012  23.08.2012   Y N N Y M SOEC  FP FD N 26 
Ukraine  16.12.1998    N N N N M SOEC  DA PD Y 4 
Note:  "5th" = fifth freedom rights; "7th = seventh freedom rights; "Cabotage" = domestic traffic; "Coop" = 
cooperation clauses; "Stat" = statistics; "ALI" = Air Liberalization Index.  
 "Y" = Yes; "N" = No; "S" = single designation; "M" = multiple designation s; "FP"  = free pricing; 
"PD" = pre -determination; "FD" = free determination; "CoI" = community of interest ; "PPOB" = 
principal place of business; and  "SOEC" = substantial ownership and effective control.  
Source:  Information provided by the authorities.  
4.4.4   Tourism services  
Tourism is still a re latively minor activity in  North Macedonia in terms of its contribution to 
GDP, but it developed during the period under review in terms of arrivals and gross foreign 
exchanges earnings  (Table 4.29) .  
Table 4.29 Tourism sector: evolution of the main economic indicators, 2013 -18 
 2013  2014  2015  2016  2017  2018  
Share of tourism in GDP (%) 1.4 1.3 1.3 1.5 1.5 1.6 
Number of tourists,  
of which  
- international  
- domestic  701,794  
 
399,680  
302,114  735,650  
 
424,314  
310,336  816,067  
 
485,530  
330,537  856,843  
 
510,484  
346,359  998,841  
 
630,594  
368,247  1,126,935 
 
707,345 
419,590 
Gross foreign exchange 
inflow (USD million)  266.60 294.7 0 266.8 0 284.7 0 331.00 352.00 
Net foreign exchange 
revenues (USD million)  136.00 145.00 107.46  104.8 0 119.75  112.80  
Source:  Information provided by the authorities.  
In 2017 , the tourism sector accounted for around 3.8% of total  employment, more than 
twice its share in GDP. 
In 2018, there were 255 hotels in North Macedonia, employing 8,150 pe ople. Detailed data 
by category of lodging facilities are available only until 2015 (Table 4.30).  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 Table 4.30 Tourist arrival, by type of accommodation facility, 2011 -15 
 
2011  2012  2013  2014  2015  
Total  320,097 312,274 302,114 310,336 330,537 
Hotels, total    117,506   118,246   121,668   131,403   145,752 
Hotels *****    13,551   11,323   14,790   17,135   24,582 
Hotels ****   45,845   46,942   42,735   43,365   47 037  
Hotels ***   26,755   28,193   32,671   40,692   42,106 
Hotels **   17,787   19,026   22,152   21,914   22,078 
Hotels *   13,568   12,762   9,320   8,297   9 949  
Boarding houses, total     331    499    726    900    545 
Boarding houses**     182    164    142    165    98 
Boarding houses*     149    335    584    735    447 
Motels, total    1,898   3,811   3,628   4,238   3,153 
Motels****  .. 226 260 417    381 
Motels***  .. 1,440 1,486 1,389    947 
Motels**  1,160 696 682 1,072    279 
Motels * 738 1,449 1,200 13,60   1,546 
Overnight lodging houses    1,545   2,807   2,755   3,389   3,607 
Spas   23,273   23,715   24,205   25,269   25,246 
Mountain lodges and houses     647    581    549    519    456 
Workers' vacation facilities    13,217   9,996   11,503   11,373   11,965 
Child and youth vacation facilities    11,983   11,774   13,295   11,908   11,951 
Youth ho stels   1,589   1,683   1,602   1,618   1,595 
Camps    15,659   15,359   11,406   10,171   7,514 
Houses, vacation apartments and rooms for 
rent, total    112,514   101,294   97,362   100,409   108,978 
Temporary lodging facilities     207    506    352    44    117 
Sleeping cars    3,318   3,487   3,906   2,311   1,912 
Uncategorized accommodation 
establishments    16,410   18,516   9,157   6,784   7,746 
.. Not available.  
Source:  Information provided by the authorities.  
The hotel sector is in expansion,  including in the luxury segment, as illustrated by Table  4.31, 
which shows that the number of nights, of both domestic and of international origin, constantly 
increased during the p eriod under review.  
Table 4.31 Number of hotel nights, 2013 -17 
 2013  2014  2015  2016  2017  
Total number of 
nights, of which  2,157,175  2,195,883  2,394,205  2,461,160  2,775,152  
- domestic  1,275,800  1,273,370  1,357,822  1,407,143  1,480,460  
- international  881,375  922,513  1,036,383  1,054,017  1,294,692  
Source:  Information provided by the authorities.  
There are over 1,000 food and beverage establishments in the country, but no data is 
available on their employment or turnover. There were 624 travels agents and tour operators active 
in the country in 2018, employing a total of 1,500 people, and 867 regis tered tour guides.  
The Ministry of Economy, through its Tourism Department, is in charge of defining policies 
in the tourism sector. It is assisted by the Agency for Promotion and Support of Tourism. A 
coordinative body for tourism was also set up by the Government. Other stakeholders include the 
Faculty of Tourism, the Tourism Chamber of the Chamber of Commerce, two autonomous chambers 
of tourism, and the Association of the Hotel and Catering Businesses (HOTAM).  
Tourism promotion activities are financed by a tourism tax of MKD 40 per overnight stay, 
80% of which remains in the municipality that collected it. In addition, eight Regional Development 
Centres (RDCs) were created, grouping all the municipalities. These Centres prepare strategic 
documents to in itiate projects at municipal level. These documents often include a regional tourism 
strategy. However, RDC resources remain limited, since they are financed by municipalities through 
a contribution of MKD 10 per year per inhabitant.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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In 2011, a non -discrim inatory subsidy programme, aimed at increasing the capacity of tour 
operators and travel agencies, was introduced, with a view to providing competitive holiday 
packages. Subsidies are granted if certain pre -conditions are fulfilled (e.g. minimum stay of th ree 
days). They are intended to lower the costs of bus transportation, air transfer, air charters, railway 
transport, and tour trips. They vary between EUR 10 and 25 per passenger, except for air charter 
transport where they vary between EUR 25 and 65 per passenger depending on the origin of the 
flight. In 2015, EUR 1.5 million was allocated to this scheme, followed by EUR 250,000 in 2016, 
EUR 890,000 in 2017, and EUR 1.2 million in 2018.  
The National Strategy for the Development of Tourism 2018 -23 is aimed , among several 
other objectives, at developing tourism beyond the two main destinations of Skopje and Lake Orhid, 
in particular mountain resorts in the western part of the country, hot waters springs/health tourism, 
and wine growing areas.  
In February 201 9, North Macedonia submitted to the WTO a notification under Article XVI:1 
of the GATT 1994 and Article 25 of the Agreement on Subsidies and Countervailing Measures55, for 
the following priorities identified by the Tourism Development  Program me for 2019 and  supported 
by the state budget:  
• international and bilateral cooperation in tourism ; 
• education and training ; 
• preparation of analyses and studies for wine and spa tourism ; 
• eco action campai gns in tourism centres ; 
• touristic signalization for cultural sites and localities ; 
• support of rural households for toursim purposes ; 
• support of business ideas for tourism, created by students ; 
• support of ten municipalities for the prepar ation of local strategies for tourism development ; 
• support of projects for innovation and digitalization in tourism ; 
• support of active tourism , and promotion of the Visit Macedonia  mobile application . 
North  Macedonia undertook  full market access and national treatment GATS commitments 
on all tourism activities , except for tourist guides for  which commercial presence remains unbound 
for both market access and national treatment so as to reflect the existing licencing, nationality and 
residency requirements.  
                                                
55 WTO Document G/ SCM/N/343/MKD, 19 March 2019.  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 5  APPENDIX TABLES  
Table A1. 1 Merchandise imports by HS sections and major HS chapters, 2012 -18 
HS Section/HS 
Chapters/subheadings  2012  2013  2014  2015  2016  2017  2018  
Total imports (EUR million)  5,071  4,983  5,505  5,801  6,177  6,835  7,672   
(% of total)  
01 Live animals and products  3.1 3.2 2.8 2.7 2.5 2.5     2.4  
02 Vegetable products  2.9 2.6 2.5 2.7 2.5 2.4      2.1  
03 Fats and oils  1.3 1.1 0.9 1.0 1.0 0.7      0.7  
04 Prepared food, beverages and 
tobacco  5.9 6.1 5.5 5.7 5.7 5.4      5.0  
05 Mineral products  24.2 18.3 16.4 12.9 9.7 10.6    11.3  
     HS 27 Mineral fuels  21.3 16.3 14.4 10.9 8.9 9.8    10.2  
HS 2710 Petroleum oils and oils 
obtained from bituminous 
minerals, other than crude  10.8 10.0 9.2 6.8 5.8 6.2      6.7  
06 Chemicals and products thereof  8.7 10.2 8.7 9.0 9.0 8.6      9.1  
     HS 38 Miscellaneous chemical 
products  1.1 1.4 1.4 2.0 2.4 2.4      2.6  
     HS 30 Pharmaceutical products  2.3 2.5 2.4 2.2 2.3 2.1      2.4  
07 Plastics and rubber  4.6 5.1 4.9 5.3 5.2 5.0      5.0  
     HS 39 Plastics and articles thereof  3.7 4.2 4.0 4.3 4.3 4.1      4.1  
08 Raw hides and skins; leather, 
furskins  and articles thereof  0.8 0.8 0.8 0.6 0.8 0.9     0.9  
09 Wood, cork, straw  1.0 1.1 1.1 1.2 1.2 1.2     1.1  
10 Pulp of wood; paper and paperboard  1.8 1.9 1.7 1.7 1.7 1.6      1.5  
11 Textiles and textile articles  7.8 8.5 8.4 8.4 7.9 7.7      7.1  
12 Footwear, headgear, etc.  0.6 0.6 0.6 0.7 0.7 0.6      0.5  
13 Articles of stone, plaster, cement  2.2 2.6 3.1 4.2 5.1 5.3      5.7  
     HS 69 Ceramic products  1.4 1.7 2.3 3.3 4.1 4.4      4.8  
14 Precious stones and metals, pearls  6.3 8.0 11.5 11.6 12.2 12.5    11.9  
     HS 71 Natural or cultured pearls, 
precious or semi -precious stones, 
precious metals  6.3 8.0 11.5 11.6 12.2 12.5    11.9  
          HS 7110 Platinum, unwrought or 
in semi -manufactured forms, or in 
powder form  6.2 7.9 11.4 11.5 12.1 12.4    11.9  
15 Base metals and articles thereof  9.6 9.0 8.9 8.9 9.1 9.9   10.0  
     HS 72 Iron and steel  6.2 5.5 5.4 5.0 5.0 5.8      6.2  
16 Machinery, electrical equipment  11.5 13.5 14.4 15.4 15.8 16.6    17.4  
     HS 85 Electrical machinery and 
equipment and parts thereof  5.4 6.6 7.7 8.3 8.7 9.8    10.9  
HS 8544 Insulated wire, cable 
and other insulated electric 
conductors  0.3 0.6 1.2 1.7 2.0 2.3      2.6  
     HS 84 Machinery and mechanical 
appliances; parts thereof  6.1 6.8 6.7 7.1 7.1 6.8      6.5  
17 Transport equipment  4.4 4.1 4.4 4.8 5.3 5.1      4.9  
     HS 87 Vehicles  4.3 4.0 4.3 4.5 5.0 4.8      4.8  
18 Precision instruments  1.1 1.4 1.3 1.2 1.4 1.3      1.2  
20 Miscellaneous manufactured articles  1.8 1.9 2.0 2.1 2.2 2.0      2.0  
21 Works of art, collectors' pieces and 
antiques  0.1 0.0 0.0 0.0 0.0 0.0      0.0  
Other (HS 98)  0.1 0.1 0.1 0.1 1.2 0.1      0.1  
Source:  WTO calculations, based on State Statistical Office MakStat Database. Viewed at: 
http://www.stat.gov.mk/PoslednoObjavenoVoMakstat_en.aspx . 
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 Table A1. 2 Merchandise exports by HS sections and major HS chapters, 2012 -18 
HS Section/HS 
Chapters/subheadings  2012  2013  2014  2015  2016  2017  2018  
Total exports (EUR million)  3,124  3,235  3,747  4,088  4,390  5,019  5,861   
(% of total)  
01 Live animals and products  0.9 0.7 0.6 0.6 0.5 0.5 0.5 
02 Vegetable products  3.8 3.9 3.5 3.4 3.4 2.6 2.2 
03 Fats and oils  0.4 0.2 0.3 0.5 0.4 0.1 0.1 
     HS 15 Animal or vegetable fats and 
oils 0.4 0.2 0.3 0.5 0.4 0.1 0.1 
04 Prepared food, beverages and 
tobacco  10.0 10.5 8.4 7.3 7.7 7.3 6.4 
     HS 24 Tobacco and manufactured 
tobacco substitutes  3.7 4.2 2.9 2.4 2.7 2.8 2.2 
05 Mineral products  11.6 7.5 6.0 5.2 4.6 6.2 6.1 
     HS 26 Ores, slag and ash  4.2 4.2 3.5 3.1 2.6 3.6 3.1 
06 Chemicals and products thereof  15.5 17.8 20.0 21.4 22.4 22.9 23.2 
     HS 38 Miscellaneous chemical 
products  12.4 14.9 17.5 19.1 20.1 20.6 21.0 
HS 3815 Reaction initiators, 
reaction accelerators and catalytic 
preparations  12.3 14.8 17.3 18.9 20.0 20.5 21.0 
07 Plastics and rubber  2.1 2.4 1.9 1.9 1.9 1.8 1.8 
08 Raw hides and skins; leather, 
furskins and articles thereof  0.4 0.4 0.3 0.2 0.2 0.2 0.2 
09 Wood, cork, straw  0.2 0.1 0.1 0.1 0.1 0.1 0.1 
10 Pulp of wood; paper and 
paperboard  0.4 0.4 0.4 0.4 0.4 0.5 0.5 
11 Textiles and textile articles  16.4 16.3 15.0 13.2 12.2 10.4 8.8 
     HS 62 Articles of apparel and 
clothing accessories, not knitted or 
crocheted  12.1 11.5 10.6 9.3 8.5 7.3 6.0 
     HS 61 Articles of apparel and 
 clothing accessories, knitted or 
 crocheted  2.8 3.0 2.9 2.4 2.2 1.9 1.6 
12 Footwear, headgear, etc.  1.7 1.8 1.7 1.4 1.3 1.2 0.9 
13 Articles of stone, plaster, cement  0.9 0.9 0.7 0.8 0.8 0.9 0.9 
14 Precious stones and metals, pearls  0.0 0.1 0.1 0.0 0.1 0.1 0.2 
15 Base metals and articles thereof  23.8 21.5 17.1 15.2 11.7 11.0 11.7 
     HS 72 Iron and steel  18.8 16.8 13.3 11.4 7.5 6.5 7.2 
     HS 73 Articles of iron or steel  4.0 3.7 2.9 2.8 3.4 3.7 3.7 
16 Machinery, electrical equipment  8.8 11.9 18.3 21.6 24.0 24.7 26.3 
     HS 85 Electrical machinery and 
equipment and parts thereof  3.5 4.8 8.9 10.2 11.6 13.3 14.7 
     HS 8544 Insulated wire, cable  0.6 1.4 5.4 6.2 8.0 8.1 8.9 
     HS 84 Machinery and mechanical 
appliances; parts thereof  5.3 7.1 9.4 11.4 12.3 11.4 11.6 
         HS 8421 Centrifuges, including 
centrifugal dryers  4.4 6.2 8.6 10.5 11.3 10.5 10.5 
17 Transport equipment  1.2 1.4 2.8 3.1 4.1 4.8 5.5 
     HS 87 Vehicles  0.9 1.1 2.4 2.7 3.7 4.5 5.2 
18 Precision instruments  0.4 0.3 0.3 0.4 0.3 0.3 0.3 
20 Miscellaneous manufactured articles  1.5 1.7 2.2 3.2 3.8 4.2 4.3 
HS 94 Furniture; bedding, 
mattresses, mattress supports  1.4 1.5 2.0 3.0 3.6 4.1 4.2 
21 Works of art, collectors' pieces and 
antiques  0.0 0.1 0.1 0.0 0.0 0.0 0.0 
Other (HS 98)  0.0 0.1 0.1 0.0 0.0 0.1 0.1 
Source:  WTO calculations, based on State Statistical Office MakStat Database. Viewed at: 
http://www.stat.gov.mk/PoslednoObjavenoVoMakstat_en.aspx . 
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 Table A1. 3 Merchandise imports by origin, 2012 -18 
  2012  2013  2014  2015  2016  2017  2018  
Total imports (EUR million)  5,071  4,983  5,505  5,801  6,177  6,835  7,672  
 (% of total)  
Americas  3.3 4.7 4.7 4.4 4.2 4.1 4.2 
  United States  1.3 1.9 2.0 1.6 2.2 2.3 2.7 
  Other America  2.0 2.9 2.7 2.8 2.0 1.8 1.5 
Europe  77.1 79.4 80.0 77.8 77.9 78.1 76.8 
  EU-28 60.3 62.7 63.4 62.0 61.9 62.9 62.4 
          Germany  9.7 10.5 11.1 12.6 12.2 11.8 11.6 
          United Kingdom  8.6 11.0 12.2 9.6 10.6 10.1 9.5 
          Greece  12.4 10.6 9.1 7.8 7.3 8.0 8.5 
          Italy 6.2 6.5 6.3 6.1 5.7 5.5 5.6 
          Bulgaria  6.3 5.5 5.3 5.3 4.6 4.3 4.3 
          Romania  1.8 1.9 2.9 3.2 3.4 3.2 3.4 
          Poland  1.5 1.5 1.4 1.5 1.7 2.9 2.6 
          Hungary  0.8 0.8 1.2 1.1 2.1 2.7 2.6 
          Slovenia  2.3 2.5 2.2 2.0 2.0 2.0 1.9 
          Austria  1.8 2.2 2.0 2.1 1.9 1.7 1.7 
          France  1.3 1.4 1.4 1.6 1.6 1.5 1.6 
          Belgium  0.5 0.7 1.0 1.2 1.4 1.7 1.6 
          Czech Republic  1.1 1.4 1.3 1.2 1.5 1.5 1.6 
          Netherlands  1.0 1.2 1.3 1.8 1.2 1.3 1.6 
          Croatia  1.9 1.7 1.5 1.5 1.5 1.4 1.2 
  EFTA 2.3 2.0 1.1 0.9 1.0 0.9 0.9 
  Other Europe  14.5 14.7 15.5 14.9 15.0 14.3 13.5 
          Serbia  7.4 7.9 8.2 7.7 7.6 7.2 6.8 
          Turkey  5.0 4.8 5.2 5.0 5.2 4.8 4.7 
Commonwealth of Independent States (CIS)  7.1 4.1 3.7 3.3 2.9 3.1 3.2 
          Russian Federation  5.5 2.5 1.9 2.4 2.1 2.0 1.4 
          Ukraine  1.3 1.4 1.5 0.8 0.7 0.9 1.4 
Africa  0.4 0.5 1.1 3.5 3.2 3.9 4.2 
          South Africa  0.1 0.0 0.6 2.9 2.5 3.2 3.3 
Middle East  0.5 0.3 0.4 0.8 0.7 0.5 0.5 
Asia 11.6 10.9 10.2 10.2 11.1 10.3 11.0 
  China  5.7 5.7 5.9 6.1 6.4 5.8 5.8 
  Japan  0.7 0.8 0.9 0.9 1.1 1.3 1.4 
  Other Asia  5.1 4.3 3.3 3.2 3.6 3.2 3.8 
Other  0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Memo:         
CEFTA  9.5 10.0 10.3 9.9 9.9 9.6 8.9 
Note:  Croatia was counted in the EU -28 although it only became an EU member country on 1  July 2013.  
Source  WTO calculations,  based on State Statistical Office MakStat Database. Viewed at: 
http://www.stat.gov.mk/PoslednoObjavenoVoMakstat_en.aspx . 
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 Table A1. 4 Merchandise expo rts by destination, 2012 -18 
  2012  2013  2014  2015  2016  2017  2018  
Total exports (EUR million)  3,124  3,235  3,747  4,088  4,390  5,019  5,861   
(% of total)  
Americas  1.7 1.4 1.4 1.1 1.3 1.2 1.3 
  United States  1.4 1.1 1.1 0.9 1.1 1.0 1.0 
  Other America  0.3 0.3 0.4 0.2 0.3 0.2 0.3 
Europe  89.7 92.9 92.9 92.3 94.6 95.1 95.2 
  EU-28 65.3 72.7 76.5 77.0 80.0 81.1 82.0 
          Germany  29.4 35.8 41.3 44.0 46.5 46.9 47.0 
          Bulgaria  7.2 7.6 6.6 6.0 5.1 5.9 5.2 
          Belgium  1.1 1.6 3.0 3.2 3.9 3.5 3.8 
          Greece  4.7 5.0 4.6 3.7 3.4 3.6 3.2 
          Italy 7.0 6.7 6.2 4.1 3.7 3.3 3.1 
          Romania  1.3 2.0 1.9 2.4 2.8 3.1 2.8 
          Austria  1.2 1.1 1.0 0.9 0.9 1.2 2.4 
          Hungary  0.2 0.2 0.4 0.5 0.9 1.5 2.1 
          United Kingdom  1.6 1.9 1.4 1.0 1.2 1.4 1.8 
          Spain  1.2 1.0 1.4 2.4 2.5 1.9 1.7 
          Croatia  2.5 2.3 1.9 1.8 1.8 1.5 1.5 
          Netherlands  1.6 1.6 1.4 1.3 1.4 1.4 1.5 
          Slovenia  1.9 1.4 1.1 1.2 1.4 1.3 1.3 
          Czech Republic  0.9 0.7 0.7 0.6 0.9 1.2 1.1 
          Slovak Republic  1.8 1.8 1.6 1.5 1.0 0.5 1.0 
  EFTA 0.8 1.0 1.1 1.0 0.7 0.7 0.7 
  Other Europe  23.6 19.3 15.3 14.3 13.8 13.2 12.4 
          Serbia  7.4 6.3 5.2 4.5 4.4 4.4 4.0 
          Other Europe, n.e.s.  9.8 6.5 4.7 4.4 4.4 4.0 3.9 
          Turkey  1.7 1.7 1.4 1.6 1.5 1.6 1.4 
          Bosnia and Herzegovina  2.1 2.2 1.9 1.8 1.7 1.5 1.4 
          Albania  1.9 1.8 1.5 1.5 1.3 1.3 1.3 
Commonwealth of Independent 
States (CIS)  1.5 1.5 1.2 1.1 1.3 1.3 0.8 
Africa  0.1 0.1 0.1 0.4 0.2 0.2 0.7 
Middle East  0.4 0.3 0.4 0.3 0.3 0.3 0.4 
Asia 6.6 3.8 3.9 4.8 2.3 2.0 1.7 
  China  4.0 2.5 1.9 3.2 1.0 1.1 1.0 
  Japan  0.0 0.0 0.0 0.0 0.0 0.0 0.0 
  Other Asia  2.6 1.3 2.0 1.5 1.3 0.9 0.7 
Other  0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Memo:         
CEFTA  22.0 17.6 13.9 12.7 12.4 11.8 11.1 
Note:  Croatia was counted in the EU -28 although it only became an EU member country on 1  July 2013.  
Source  WTO calculations, based on State Statistical Office MakStat  Database. Viewed at: 
http://www.stat.gov.mk/PoslednoObjavenoVoMakstat_en.aspx . 
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 Table A2. 1 Selected notifications under WTO Agreements, 31 March 2019  
Agreement  Description  Frequency  Symbol and date of latest 
notification  
Agreement on Agriculture  
Articles 10 and 18.2 
(ES:1 and ES:2)  Export subsidies  Annual  G/AG/N/MKD/21, 16.01. 2018 
Article 18.2 (DS:1)  Domestic support commitments  Annual  G/AG/N/MKD/10, 15.02.2011  
Article 18.2 (MA:2)  Tariff and other quota commitments  Annual  G/AG/N/MKD/2 4, 28.01. 2019 
Agreement on  Implementation of Article  VI of the GATT 1994 (anti -dumping ) 
Article 16.4  Anti-dumping actions  Semi-
annual  G/ADP/N/314/Add.1 /Rev.1 , 
23.10.2018  
Article 16.5  Competent authority  Ad hoc  G/ADP/N/14/Add.46, 
17.10. 2018 
Agreement on Implementation of  Article  VII of the GATT 1994 ( customs valuation ) 
Article 22 .2 Changes in laws/regulations and 
administrative arrangements  Ad hoc  G/VAL/N/1/MKD/1, 09.03.2005  
Decision A.3  
(G/VAL/5)  Date of application of the decision on the 
treatment of interest charges in the 
customs value of imported goods 
(VAL/6/Rev.1)  Once only  G/VAL/N/3/MKD/1, 16.02.2005  
Decision A.4  
(G/VAL/5)  Date of application of th e decision on the 
valuation of carrier media bearing 
software for data processing equipment 
(VAL/8)  Once only  G/VAL/N/3/MKD/1, 16.02.2005  
Agreement on Import Licensing  Procedures  
Article s 5.1-5.4 Import  licensing procedures or changes  
thereto  Ad hoc  G/LIC/N/2/MKD/2, 14.12. 2017 
Article 7.3  Replies to questionnaire on import 
licensing procedures  Annual  G/LIC/N/3/MKD/7, 06.03. 2018 
Article  8.2(b)  Changes in  laws/regulations and 
administrative arrangements  Ad hoc  G/LIC/N/1/MKD/4, 28.09.2011  
Agreement on Rules of  Origin 
Article 5 and para. 4 
of Annex II  Judicial decisions  and administrative 
rulings of gener al application relating to  
preferential  and non -preferential  rules of 
origin  Once, 
promptly 
after entry 
into force 
of the WTO 
Agreement  G/RO/N/45, 9.11.2004  
Agreement on Safeguards  
Article 12.6  Legislation  Ad hoc  G/SG/N/1/MKD/1/Suppl.1, 
28.06.2005  
Agreement on the Application of  Sanitary and  Phytosanitary  Measures  
Article 7 and Annex B  Proposed and adopted SPS regulations  Ad hoc G/SPS/N/MKD/5 -8, 13.03.2019  
Agreement on Subsidies and Countervailing  Measures  
Article 25.1 , and 
Article XVI:1 of the 
GATT 1994  New and full notification of subsidies  Annual  G/SCM/N /343/MKD, 
19.03. 2019 
Article 25.11  Counterva iling duty actions  Semi-
annual  G/SCM/N/334/Add.1, 
19.10.2018  
Article 25.12  Competent authority  Ad hoc  G/SCM/N /18/Add.46, 
17.10.2018  
Article 32.6  Legislation  Ad hoc  G/SCM/N/1/MKD/1/Suppl.1, 
28.09.2005  
Agreement on Technical Barriers to Trade  
Articles 2.9 and 5.6  Technical  regulations  Ad hoc  G/TBT/N/MKD/8, 27.03.2015  
Article 2.10  Technical regulations  (urgent)  Ad hoc  G/TBT/N/MKD/7, 04.05.2012  
Article 15.2  Changes in legislation  Ad hoc  G/TBT/2/Add.84/Rev.1, 
09.11.2012  
Agreement on Trade Facilitation  
Article 1.4  Contact persons  Ad hoc  G/TFA/N/MKD/1/Rev.1, 
16.01. 2018 
G/TFA/N/MKD/1/Rev. 2, 
12.11.2018  
G/TFA/N/MKD/1, 22 .09.2017 
Articles 15 and 16  Category commitments  Additional 
information  G/TFA/N /MKD/2, 30.01.2018  
Only once  
 WT/PCTF/N/MKD/1, 
13.02.2015  
General  Agreement on Trade in Services  
Article III:3  New, or any changes to existing, laws, 
regulations or administrative guidelines  Ad hoc  S/C/N/266/Corr.1, 17.02.2004  
Article V:7(a)  Regional trade a greement s Ad hoc  S/C/N/514, 07.10.2009  WT/TPR/S/ 390 • The Republic of North Macedonia  
 
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 Agreement  Description  Frequency  Symbol and date of latest 
notification  
Agreement on Trade-Related  Aspects of  Intellectual Property  Rights  
Article 63.2  Laws and regulations   Ad hoc  IP/N/1/ MKD/3, 30.09.2016  
IP/N/1/ MKD/4, 30.09.2016  
IP/N/1/ MKD/5, 30.09.2016  
IP/N/1/MKD/6, 30.09.2016  
IP/N/1/MKD/E/1, 30.09.2016  
IP/N/1/MKD/E/2, 30.09.2016  
IP/N/1/ MKD/C/2, 30.09.2016  
IP/N/1/ MKD/I/3, 30.09.2016  
GATT 1994  
Article XVII:4(a)  State trading  Annual  G/STR/N/17/MKD, 27.07. 2018 
G/STR/N/15/MKD/Rev.2,  
09.05.2018  
G/STR/N/16/MKD/Rev.2, 
09.05. 2018 
Article XXIV:7(a)  Regional t rade agreement s Ad hoc  WT/REG248/N/1, 27.08.2008  
WT/REG233/N/1/Rev.1, 
30.07.2007  
Article XXIV:7 (c) and 
para. 14 of the 
Transparency 
Mechanism for 
Regional Trade 
Agreement s 
(WT/L/671)  Changes in r egional trade agreement s Ad hoc  WT/REG117/N/1/Add.4, 
18.10.2010  
Source:  WTO Secretariat.  
  
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- 126 - Table A3. 1 Incentives under the 2018 Law on Financial Support of Investments  
Purpose of 
financial support  Beneficiaries  Nature of support  Maximum 
annual amount  Maximum 
duration  Requirements  
Creation of new and 
better -paid jobs  Companies that create jobs 
paying 50% or more than 
the minimum net wage  20% support of the paid net 
wage for each new job  EUR 4,400  for 
each new job  5 years  At least 75% of the newly -employed 
persons must meet one of the following:  
i) were unemployed for the past 
3 months;  
ii) are employed for the first time by the 
beneficiary;  
iii) their previous employment was 
terminated due to liquidation/bankruptcy 
procedures;  
iv) were employed in the public or state 
administration prior to emp loyment by the 
beneficiary  
Cooperation with 
domestic suppliersa Production companies 
located in technological 
industrial development zones 
(TIDZ) that purchase 
inputs/products from 
domestic suppliers to be 
integrated in a final product 
intended for export  1% of the value of 
inputs/products purchased from 
domestic supp liers (excluding 
purchases from public utilities 
and professional services)  EUR 300,000 in 
MKD equivalent  7 years  i) inputs/products purchased from 
domestic suppliers must account for 15% 
of the final product; and  
ii) maintain the business activity for at  
least 3 years after the last instalment of 
financial support has been paid  
Establishment of 
technology and R&D 
departments  Companies that establish 
departments or centres for 
R&D with highly qualified 
personnel  Up to 50% of total eligible costs 
(instruments and equipment, 
buildings, land, contractual 
research and patents, 
consultative services, additional 
and operating costs)  EUR 1,000,000 in 
MKD equivalent  5 years  i) core activity must be manufacturing; 
and 
ii) results of R&D must be applicable to 
production  
Investments of 
significant economic 
interest to the 
country  Investments of at least:  
• EUR 4 million and ensure 
at least 300 new jobs  
• EUR 20 million  
 Possible forms:  
i) exemption from income tax on 
employees' wages (North 
Macedonian citizens);  
ii) Exemption from profit tax;  
iii) cash grant amounting to 
10% of the investment, up to 
EUR 1,000,000;  
iv) cash grant (EUR 2,000 to 
EUR 4,000, depending on 
number of employees) per each 
employee earning at lea st 50% 
more than the minimum net 
wage  Up to 50% of total 
costs in 
accordance with 
the Law on State 
Aid Control  
 i) 10 years  
 
ii) 10 years  
 
iii) 3 years  
 
iv) 4 years  
 i) maintain the investment and the newly 
created jobs for at least 5 years after the 
investment project has ended   
  WT/TPR/S/390 • The Republic of North Macedonia  
 
- 127 - Purpose of 
financial support  Beneficiaries  Nature of support  Maximum 
annual amount  Maximum 
duration  Requirements  
Increases in capital 
investment and 
revenues  Companies that make initial 
or additional investments in 
machines and equipment or 
in premises and land 
necessary for their business  10% of the investment  
An additional 10% for investors 
that are part of the country's 
diaspora  EUR 1,000,000 in 
MKD equivalent  5 years  i) The company must maintain at least the 
average number of employees and of 
revenues achieved in the previous 3 
years; and  
ii) maintain the i nvestment for at least 
5 years after the investment project has 
ended  
Acquisition of 
companies in 
financial difficulties  Companies that acquire 
tangible assets from a 
business entity facing a 
bankruptcy or liquidation 
procedure  10% of the costs for acquir ing 
the tangible assets  
An additional 10% for investors 
that are part of the country's 
diaspora  EUR 1,000,000 in 
MKD equivalent  A one -time 
payment 
within 1 
year i) The company must restart the activity of 
the business under bankruptcy/liquidation 
procedures;  
ii) The company must not be related to the 
business under bankruptcy/liquidation 
procedures;  
iii) the business under bankruptcy or 
liquidation procedures must have had at 
least 50 employees; and  
iv) The company must maintain the new 
investment  project for at least 5 years 
from its initiation  
Increased market 
competitiveness  Companies that achieve 
growth in sales or revenues 
in the market  10% of eligible investment costs  
An additional 10% for investors 
that are part of the country's 
diaspora  EUR 1,000,000 in 
MKD equivalent  5 years  i) The company must increase sales by at 
least 5% with respect to their average in 
the previous 3  years; and  
ii) increase the average number of 
employees and the average revenue by at 
least 5% with respect to their average in 
the previous 3 years  
Opening new 
markets and 
increasing sales  Companies that gain new 
markets and increase sales 
in new markets  
Does not apply to TIDZ users  20% of eligible costs (e.g. 
participation in fairs, business 
events and meetings abroad , 
foreign market research, product 
certification to meet foreign 
standards, marketing 
presentations and promotional 
materials)  EUR 30,000  in 
MKD equivalent  Until cap 
reached  i) The company must maintain or increase 
the number of employees compared to the 
average number of employees in the last 
three years; and  
ii) increase revenue compared to the 
average revenue of the last three years  
 
a Supplier registered in North Macedonia.  
Source:  WTO Secretariat based on the Law on Financial Support of Investments . 
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